Exploring the Basel Committee's Draft on Crypto Asset Exposure

blockchain.news:

On October 17, 2023, the Basel Committee on Banking Supervision released a consultative document concerning the disclosure of cryptoasset exposures by banks, seeking public feedback until January 31, 2024. The document is accessible on the BIS website. This comes following the Committee's publication in December 2022, titled «Prudential Treatment of Cryptoasset Exposures», which introduced prudential requirements for banks dealing with cryptoassets, set to be enforced starting January 1, 2025.

Standardized Disclosure Templates

To ensure uniformity in disclosures, the Committee has devised standardized disclosure templates encapsulated in a new chapter of the Basel Framework, DIS55 – Cryptoasset Exposures. These templates embody the disclosure requirements outlined in paragraphs SCO60.128 to SCO60.130 of the consolidated Basel Framework. Through DIS55, the Committee aims to foster market discipline and diminish information asymmetry between banks and market stakeholders. This initiative is part of the broader effort to integrate cryptoasset regulations within the overarching requirements stipulated in chapter DIS10 of the Basel Framework, covering the scope, reporting location, frequency, and assurance of Pillar 3 data disclosure.

Templates Detailing Cryptoasset Exposures

The draft includes several templates to categorize and detail banks' cryptoasset exposures:

Template CAE1: Offers a glimpse into a bank's cryptoasset exposures according to prudential classifications and the associated capital requisites.

Template CAE2: Focuses on the accounting classification of exposures to cryptoassets and cryptoliabilities.

Template CAE3: Addresses liquidity requisites for exposures to cryptoassets and cryptoliabilities.

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