Swedish Finance Minister Elisabeth Svantesson emphasized that the goal of the new regulation on behalf of EU member states is to increase the reliability and resilience of local banks. The ECON proposal sets a potential risk weight of up to 1250% for crypto-assets with free floating exchange rates. This would require banks to provide a maximum risk weight of 1,250%. Essentially, banks would be required to have capital of €1 for every €1 of bitcoin or ether they hold. In addition to rules specific to cryptocurrencies, the financial impact of digital assets will also be assessed and risks for other bank assets, such as loans to businesses, will be adjusted.
"The final amendments will be published after approval by EU member state lawmakers. The transitional measures will be in place until January 2025, when the international Basel III rules come into force. "The goal is to address the potential risks posed to financial institutions by exposure to crypto-assets that are not adequately covered by the current prudential system," the European Parliament spokesman said.
While the statement confirms that a "temporary prudential regime for crypto-assets in the banking sector" will be included, the European Parliament declined to elaborate on the issue. Recently, the EU's EBSI VECTOR project team and blockchain solution provider Protokol announced a joint effort to create a decentralized framework for cross-border civil documents.