VRB News
  • Home
  • About us
  • IT news
  • Tech
  • World
  • Contact
No Result
View All Result
  • Home
  • About us
  • IT news
  • Tech
  • World
  • Contact
No Result
View All Result
VRB News
No Result
View All Result
Home IT news

Banks should invest only 1 percent in digital assets

admin by admin
July 4, 2022
in IT news
0
Banks should invest only 1 percent in digital assets
0
SHARES
7
VIEWS
Share on FacebookShare on Twitter

On Thursday, as part of its second consultation on the regulatory treatment of crypto assets, the Basel Committee on Banking Supervision proposed that banks should limit their exposure to Group 2 crypto assets to only 1 percent of their core capital.

Group one digital assets are, for example, tokenized traditional assets such as synthetic stocks or assets with effective stabilization mechanisms such as regulated stablecoins. This proposal provides for Group 1 digital assets to be subject to at least the same risk-based capital requirements as traditional assets under the current capital requirements (Basel III).

Cryptocurrencies that do not meet the above requirements are classified as group 2 digital assets, which theoretically include the most important cryptocurrencies that are not stablecoins or tokenized, such as Bitcoin (BTC) and most altcoins. Therefore, banks could invest only 1 percent of their total equity or net asset value in long or short positions in group 2 digital assets.

The Basel Committee is also considering that banks will introduce a risk premium of 1,250 percent for Group 2 digital assets. In comparison, a risk premium of 20 percent to 150 percent applies to shares, depending on the creditworthiness of the company. According to Basel III, a bank’s risk-weighted assets may not account for more than 10.5 percent of its core capital. This achieves an appropriate level of indebtedness.

Such a measure would likely severely limit banks’ ability to buy volatile cryptocurrencies in the future, as a bank would have to add $125 million worth of risk-weighted assets to its portfolio for every $10 million worth of Bitcoin purchase. This would make them far less lucrative than assets with lower mark-ups. Basel III is an international regulatory agreement that almost all financial institutions in developed countries must adhere to. This is also enforced.

Previous Post

“Cryptoqueen” Ruya Ignatova Now on FBI list of most wanted criminals

Next Post

Spain, at the forefront of interest in virtual reality

admin

admin

Related Posts

BitGo Sues Galaxy Digital for breach of contract for $100 million
IT news

BitGo Sues Galaxy Digital for breach of contract for $100 million

August 18, 2022
SAP silvered learning platform Litmos
IT news

SAP silvered learning platform Litmos

August 18, 2022
Digital Gold in Brazil: Tokenization of precious metals
IT news

Digital Gold in Brazil: Tokenization of precious metals

August 18, 2022
IT news

Oculus recognizes that the lenses of the DK2 are easily scratched

August 18, 2022
Fraudulent mail on behalf of the Federal Government
IT news

Fraudulent mail on behalf of the Federal Government

August 18, 2022
Next Post
Spain, at the forefront of interest in virtual reality

Spain, at the forefront of interest in virtual reality

Premium Content

Director of marketing TriggMine told about the principles of email marketing and shared his predictions for 2017

Director of marketing TriggMine told about the principles of email marketing and shared his predictions for 2017

July 8, 2020
6 reasons to invest in SEO

6 reasons to invest in SEO

January 1, 2022
Mobile App Strategies for sustainable business success

Mobile App Strategies for sustainable business success

July 13, 2021

Browse by Category

  • Games
  • IT news
  • Tech
  • World
VRB News

VRB News is ready to cooperate with webmasters and content creators. Send an email to info@virtualrealitybrisbane.com

Categories

  • Games
  • IT news
  • Tech
  • World

Recent Posts

  • BitGo Sues Galaxy Digital for breach of contract for $100 million
  • SAP silvered learning platform Litmos
  • Digital Gold in Brazil: Tokenization of precious metals

© 2021 - The project has been developed ServReality

No Result
View All Result
  • Home
  • About us
  • IT news
  • Tech
  • World
  • Contact

© 2021 - The project has been developed ServReality

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?