Global Regulator: Crypto Exposure Reporting Should Be Mandatory for Banks

The Basel Committee on Banking Supervision has underscored the importance of disclosing banks’ cryptoasset exposures, emphasizing the need for standardized reporting and greater transparency in the crypto space.

In a consultative document, the committee proposed mandatory reporting requirements for banks related to their crypto activities.

The proposals extend to both qualitative and quantitative aspects of crypto exposures, the committee said.

A new Basel Committee consultative document proposes a standardised disclosure table and set of templates for banks’ cryptoasset exposures: comments welcome by 31 January 2024 https://t.co/SzMwXNxuQF pic.twitter.com/0e7lXWspab

— Bank for International Settlements (@BIS_org) October 17, 2023

The disclosure includes information about the bank’s crypto-related activities, details on exposures to crypto, and associated liquidity requirements.

Banks must also provide information about how they classify their crypto-related exposures and liabilities.

The Basel Committee aims to implement these disclosure requirements by January 1, 2025.

By standardizing crypto exposure reporting, the committee seeks to promote market discipline and bridge the information gap between banks and market participants.

The committee has invited comments from the public, market participants, and disclosure users and preparers regarding these proposals.

All comments received by January 31, 2024, will be made public on the Bank for International Settlements (BIS) website unless the respondent explicitly requests confidential treatment.

As the primary global standard setter for the prudential regulation of banks, the Basel Committee plays a crucial role in enhancing financial stability.

While its decisions don’t hold legal force, they influence banking practices and regulations worldwide.

The Basel Committee on Banking Supervision was established in 1974 by central bank governors from what was then known as the G10 countries.

The committee’s secretariat is located at the Bank for International Settlements’ headquarter in Basel, Switzerland.