The Basel Committee on Banking Supervision has proposed a risk weighting of 1,250 per cent for cryptocurrencies such as bitcoinThe regulator that sets banking rules around the world has thrown the book at cryptocurrencies such as bitcoin, saying that banks must hold more than hundred times as much capital against crypto-denominated assets as against safer ones such as residential mortgages. The Basel Committee on Banking Supervision said that the digital currencies posed “unique risks” to the banking system and should be treated in a way that ensures banks have enough extra capital to absorb losses in the event that their prices crash to zero. SponsoredA “new conservative prudential treatment” was needed for some kinds of crypto, the committee said, specifically naming bitcoin. It cited the “high volatility” of some cryptoassets, adding that the size of the industry was now “meaningful”, characterised by rapid

Source: The Times June 10, 2021 16:05 UTC