BIS | Governors and Heads of Supervision endorse global bank prudential standard for cryptoassets and work programme of Basel Committee

• The Basel Committee’s oversight body endorses a global prudential standard for banks’ exposures to cryptoassets, for implementation by 1 January 2025.
• Endorses the Committee’s work programme and strategic priorities for 2023–24.
• The programme prioritises work on emerging risks and vulnerabilities, digitalisation, climate-related financial risks and Basel III implementation.

The Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of the Basel Committee on Banking Supervision, met on 16 December to endorse a finalised prudential standard on banks’ cryptoasset exposures and the Committee’s work programme and strategic priorities for 2023–24.

“Today’s endorsement by the GHOS marks an important milestone in developing a global regulatory baseline for mitigating risks to banks from cryptoassets. It is important to continue to monitor bank-related developments in cryptoasset markets. We remain ready to act further if necessary.”

Tiff Macklem, Chair of the GHOS and Governor of the Bank of Canada

“The Committee’s standard on cryptoasset is a further example of our commitment, willingness and ability to act in a globally coordinated way to mitigate emerging financial stability risks. The Committee’s work programme for 2023–24 endorsed by GHOS today seeks to further strengthen the regulation, supervision and practices of banks worldwide. In particular, it focuses on emerging risks, digitalisation, climate-related financial risks and monitoring and implementing Basel III.”

Pablo Hernández de Cos, Chair of the Basel Committee and Governor of the Bank of Spain

Cryptoassets

The GHOS endorsed the Committee’s finalised prudential treatment for banks’ exposures to cryptoassets. Unbacked cryptoassets and stablecoins with ineffective stabilisation mechanisms will be subject to a conservative prudential treatment. The standard will provide a robust and prudent global regulatory framework for internationally active banks’ exposures to cryptoassets that promotes responsible innovation while preserving financial stability. GHOS members agreed to implement the standard by 1 January 2025, and tasked the Committee with monitoring the implementation and effects of the standard.

While the global banking system’s direct exposures to cryptoassets remain relatively low, recent developments have further highlighted the importance of having a strong global minimum prudential framework for internationally active banks to mitigate risks from cryptoassets. To that end, the GHOS tasked the Committee with continuing to assess bank-related developments in cryptoasset markets, including the role of banks as stablecoin issuers, custodians of cryptoassets and broader potential channels of interconnections. More generally, the Committee will continue to collaborate with other standard-setting bodies and the Financial Stability Board to ensure a consistent global regulatory treatment of stablecoins.

Basel Committee work programme for 2023–24

The GHOS also endorsed the strategic priorities and work programme of the Committee for 2023–24. In addition to pursuing a forward-looking approach to identifying and assessing emerging risks and vulnerabilities to the global banking system, the work programme places high priority on work related to the ongoing digitalisation of finance, climate-related financial risks and monitoring, implementing and evaluating the Basel III framework.

Note to editors: The Basel Committee is the primary global standard setter for the prudential regulation of banks and provides a forum for cooperation on banking supervisory matters. Its mandate is to strengthen the regulation, supervision and practices of banks worldwide with the purpose of enhancing financial stability. The Committee reports to the Group of Central Bank Governors and Heads of Supervision and seeks its endorsement for major decisions. The Committee has no formal supranational authority, and its decisions have no legal force. Rather, the Committee relies on its members’ commitments to achieve its mandate. The Group of Central Bank Governors and Heads of Supervision is chaired by Tiff Macklem, Governor of the Bank of Canada. The Basel Committee is chaired by Pablo Hernández de Cos, Governor of the Bank of Spain. More information about the Basel Committee is available here.

Compliments of Bank for International Settlements.