The decision echoes the rules of the Basel Committee on Banking Supervision, which require holdings of unsecured bank assets must be given the highest possible risk weight. The new norm, if approved by Parliament, will significantly tighten the existing reserve norms. The amendments will have a significant impact on the capital of banks, but they will not come as a surprise to the market, since financial institutions regularly face the consequences of the application of these measures during the reorganization and revocation of licenses.
The new restrictions equate the crypto assets recorded on the balance sheets of banks with promissory notes, collateral or fictitious lending to companies when the loan is classified as bad and requires 100% reserve.
“Banks will be required to reserve euros of equity for every euro held in crypto. Such prohibitive capital requirements will help prevent the spread of volatility in the crypto world to the financial system,” explained the economic representative of the European People’s Party, the largest political group in Parliament, Markus Ferber.
The Association for Financial Markets in Europe (AFME), a lobby group representing traditional financial institutions such as investment banks, expressed concern that the scope of the amendment could be too broad.
To become law, a bill approved by the Committee on Economic and Monetary Affairs must pass the approval of the European Parliament and be agreed with the ministers of national finance of the EU countries.
Earlier, the European Parliament postponed the final consideration of the bill on the regulation of cryptocurrencies in the European Union (MiCA) to April.