Banks Can Keep 1% Of Reserves In Bitcoin, Bank For International Settlements Says

It’s been just revealed that the Bank for International Settlements will allow banks to keep 1% of their reserves in Bitcoin. This is bullish news that is set to fuel crypto upwards moves which are more than welcome considering the downward trend of the markets.

Finbold online publication notes that despite the skeptical approach to crypto, exacerbated by the recent crypto market crash, it seems that the Bank for International Settlements (BIS) intends to extend its hand to the new asset class by allowing banks to hold up to 1% of reserves in cryptocurrencies such as Bitcoin (BTC).

The same online publication notes that BIS’s Basel Committee on Banking Supervision (BCBS) has made the proposal for limiting the banks’ total exposures to “Group 2 cryptossets to 1% of Tier 1 capital” in its consultative document titled “Second consultation on the prudential treatment of cryptoassets,” published on June 30.

They also noted the fact that Group 2 is referring to the assets that do not meet classification conditions and includes specific tokenized traditional assets and stablecoins. The same group is also referring at the unbacked crypto assets. As opposed to Group 2, Group 1 will consist of tokenized traditional assets and stablecoins that meet classification conditions.

Check out the official notes below:

“Banks’ exposures to Group 2 cryptoassets will be subject to an exposure limit. Banks must apply the exposure limit to their aggregate exposures to Group 2 cryptoassets, including both direct holdings (cash and derivatives) and indirect holding (ie those via investment funds, ETF/ETN, special purpose vehicles).”

Check out the original article in order to learn more details about all this.

The crypto market suffered a lot of price drops recently and this is due to more reasons which we have analyzed during our previous articles.

At the moment of writing this article, the crypto market is making huge efforts to recover following recent price losses.