EU Plans to Tighten Requirements for Banks Offering Crypto Investments | news

Lawmakers in the European Parliament have voted in favor of tightening the standards that must be met by banks holding cryptocurrencies in the EU. As reported by Reuters, they will have to back the digital assets with capital.

The decision involves the application of a 1.250% risk weighting factor in relation to crypto assets. Once the measure is introduced, financial institutions will have to ensure full coverage of capital reserves and will lose the ability to use leverage in transactions with digital assets.

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The risk assessment indicator proposed by the document is the highest level of security under Basel III, the Basel Committee on Banking Supervision (BCBS) guidelines, which were approved in 2010-2011.

The bill being considered by the European Parliament aims to implement the remaining elements of the organization’s standards.

Another amendment obliges the European Commission to “examine the need for a special prudential regime for crypto assets.”

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