Month: January 2023
EU Banks Must Now Hold More Capital for Crypto Losses: New Rules Agreed
• European Union lawmakers have agreed to stricter new requirements for banks dealing with crypto and digital assets.
• The new rules will require banks to hold more capital to protect customers against crypto losses, as well as disclose their crypto exposures.
• The new measures are part of the Basel III International Regulatory Framework, which is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision.
The European Union recently took a major step towards better regulating the cryptocurrency market by introducing stricter new requirements for banks dealing with digital assets. This measure was taken to limit the number of unbacked loans with Bitcoin (BTC) and Ethereum (ETH) that lenders could hold in front of the European Commission.
The European Parliament’s Economic and Monetary Affairs Committee has voted on the matter that will put these restrictions in place. Cross-party compromises will require banks to hold more capital to protect customers against crypto losses. This amendment means that when the rules come into effect, banks must apply a risk-weighting of 1,250% to crypto-asset exposures.
The new rules will need approval from the European Parliament and the EU Finance Ministers for this measure to become law. The proposed amendment also includes a requirement for the banks to disclose if and how they are exposed to cryptocurrencies.
The new measures are part of the Basel III International Regulatory Framework, which is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision. This Basel III component strengthens the financial framework by agreeing to solid capital requirements. The Basel III framework also includes the Capital Requirements Directive, the Market Risk Directive, and the Solvency II Directive.
The new rules have been welcomed by the crypto community as a major step forward in the world of digital assets. The rules will create more trust and stability in the market, allowing banks to safely interact with digital assets without fear of losing capital. This will also enable banks to differentiate between legitimate and fraudulent activities, as well as facilitate the development of a more transparent and well-regulated digital asset market.
In conclusion, the new rules proposed by the European Union are a major step forward in the world of digital assets. They will help to create more trust and stability in the market, allowing banks to safely interact with digital assets without fear of losing capital. These rules will also enable banks to differentiate between legitimate and fraudulent activities, as well as facilitate the development of a more transparent and well-regulated digital asset market.
‘Ripple VP to Speak at Digital Pound Webinar on CBDC Use Cases and Benefits’
• Ripple’s Vice President of Central Bank Engagements and CBDCs, James Wallis, will be delivering the keynote at a webinar on the potential use cases and benefits of a digital pound in the UK.
• The webinar is hosted by the Digital Pound Foundation, which Ripple joined in October 2021.
• The panel will focus on the potential benefits of CBDCs, and how they can be used in the UK.
Ripple is actively working to drive the agenda of Central Bank Digital Currencies (CBDCs) across the globe, and one country where the company is particularly active is the United Kingdom. On Thursday, January 26, James Wallis, Vice President of Central Bank Engagements and CBDCs at Ripple, will be delivering the keynote at a webinar addressing the potential use cases and benefits of a digital pound.
The webinar is hosted by the Digital Pound Foundation, which Ripple joined in October 2021. The foundation is focused on the development and launch of a digital pound in the United Kingdom. Susan Friedman, Head of Policy at Ripple, is part of the foundation and serves as a board member to help strengthen Ripple’s initiative to engage with central banks worldwide on technical and policy issues related to CBDCs.
Participating in the discussion will be William Lorenz (co-leader of the Digital Pound Foundation’s use case working group), Chris Ostrowski (CEO and co-founder, SODA), Jakub Zmuda (strategy officer, Modulr), Andrew Dare (CTO banking and financial markets director advisory expert, CGI), Claire Conby (managing director at Billon), and David Karney (head of digital assets, Worldline).
The panel will focus on the potential benefits of CBDCs, and how they can be used in the United Kingdom. It will look at the use cases and benefits they can offer, such as increased financial inclusion, improved access to financial services, and the potential for reduced transaction costs. The discussion will also address the wider implications of CBDCs, such as new economic models, and the impact on global payments.
In its predictions for 2023, the Ripple leadership team highlighted Central Bank Digital Currencies as one of the biggest trends, and the webinar will provide a great opportunity to explore the potential of CBDCs in the UK. With the participation of industry leaders, the webinar will be a valuable resource for those interested in learning more about CBDCs and their potential applications.