O European Central Bank (ECB) promised this Wednesday to define how the banks will offer digital assets to ensure they have sufficient capital and expertise in a sector that parliamentarians from European Union describe it as the “Old West”.
The ECB said that banks are considering getting involved in the cryptocurrenciesbut that national rules diverged greatly.
“At Germanycertain cryptocurrency activities are subject to a banking license requirement and, to date, several banks have applied for authorization to carry out these licensed activities,” the ECB said in a statement.
The European Central Bank, which directly regulates major eurozone banks, said it will examine whether cryptocurrency activities align with a bank’s risk profile, which determines how much capital to hold.
The ECB will also verify that a bank can identify and assess crypto-asset risks and that board members and IT staff have robust industry experience.
Global regulators at the Basel Committee in Switzerland are evaluating whether there should be specific capital reserves for cryptocurrency assets in banks.
Ville Niinisto, a member of the Green Party of the European Parliament, has proposed that bank holdings of bitcoin and other non-asset-backed cryptocurrencies do not exceed 1% of a bank’s core measure of tier 1 capital.
Such a limit would need the support of the entire parliament and the states of the European Union to become law, a lengthy process.
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Source: Moneytimes
I am an author at Global happenings and I mostly cover automobile news. In my time working in the automotive industry, I have developed a keen interest in the latest developments and trends. My writing skills have also allowed me to share my knowledge with others through articles and blog posts.
