European Central Bank: European banks should start to set the upper limit on the holdings of special currency before the regulations formulated by BCBS come into effect

It is reported that the European Central Bank said that European banks should start to set caps on the holdings of special currencies before the global norms formulated by the Basel Committee on Banking Supervision (BCBS) come into force. The European Central Bank said that although cryptocurrencies have not yet had a significant impact on European banks, banks should treat these assets as risky assets and immediately limit their holdings. The European Central Bank also said that the BCBS standard has not been legally binding in the EU, but if banks want to enter this market, they should comply with the standard and take into account the regulatory requirements in their business and capital planning.

Interpretation of this information:

The European Central Bank has advised European banks to set caps on their holdings of cryptocurrencies, despite them not yet having a significant impact on the banks. The bank is urging banks to consider cryptocurrencies to be risky assets and limit the amount they hold. This advice comes ahead of global norms that are being formulated by the Basel Committee on Banking Supervision (BCBS), which are not legally binding in the EU but should still be taken into account by banks that want to enter this market. The European Central Bank reminds banks that they must comply with regulatory requirements in their business and capital planning.