1. EU lawmakers have voted for more restrictive capital requirements on banks holding crypto. Banks would be required to hold a “risk-weighted exposure amount” of up to 1,250% of capital based on exposure to crypto.
2. This decision is in line with those from the Basel Committee on Banking Supervision, a body responsible for international banking standards.
3. As of 2021, BCBS reported that banks’ exposure to crypto assets was more than $9 billion.

The European Parliament has recently announced that the Economic and Monetary Affairs Committee has voted overwhelmingly in favor of amendments to its Capital Requirements Regulation and Capital Requirements Directive, which apply to banks holding cryptocurrencies. These amendments would require banks to set aside a certain amount of capital, depending on the level of exposure to crypto assets.

The committee’s decision is in line with those from the Basel Committee on Banking Supervision (BCBS), the body responsible for international banking standards. BCBS has released consultation papers in 2019, 2021, and 2022, exploring divisions of crypto assets into groups and recommending how banks should address potential risks. According to the BCBS’s 2021 report, banks’ exposure to crypto assets was more than $9 billion.

Under the new measures, banks would be required to hold a “risk-weighted exposure amount” of up to 1,250% of capital based on exposure to crypto. This means that the banks would need to set aside a certain portion of their capital that is proportionate to the risk associated with their crypto holdings.

The European Parliament also noted that this new measure was intended to protect customers from potential losses due to cryptocurrency investments. It is also intended to ensure that banks have sufficient capital to cover any losses due to the volatile nature of cryptocurrencies.

The new measures are set to be passed by the full parliament, although the exact date of implementation is not yet known. It is expected that the new rules will be in effect for all banks within the European Union by the end of 2023.

These new measures may have a significant impact on the cryptocurrency landscape in Europe. Banks may become more reluctant to offer services related to crypto investments, which could lead to a decrease in the number of investors in the European market. On the other hand, it could also lead to increased security and transparency in the industry, as banks are forced to follow stricter regulations.

In any case, the European Parliament’s decision is a major step towards regulating the cryptocurrency market in Europe. It is expected that other countries will follow suit and implement similar measures in the near future.