The Basel Committee on Banking Supervision is calling for feedback on the prudential regulatory treatment of crypto-assets.

Feedback received from insiders in both the crypto and traditional finance sectors will be used to draft guidelines for banks interested in dealing with crypto-assets.

Although they are wary of risks associated with the coins, the Committee sees that “some may have the potential to become systemically important” and is looking to “develop a holistic approach to [their] regulatory treatment.”

The Committee of central banks believes that the continued growth of crypto-asset trading platforms and new financial products has the potential to “raise financial stability concerns and increase risks faced by banks.”

Noted risks are comparable to those offered by other regulatory bodies, such as fraud and cyber risks, money laundering, and terrorist financing.

Because of this, it is advising banks that if they decide to acquire crypto-assets or provide related services they should apply a “conservative prudential treatment to such exposures” to protect the institution and its clients.

The Committee has published a discussion paper on the issue and is asking for feedback from stakeholders: from academics, to banks and finance ministries, to tech companies and the general public.

This all-encompassing approach likely means that industry insiders — those that know the ins and outs of blockchain-based payment systems and crypto-assets —  will be able to help craft guidelines that benefit the cryptosphere as well as the banks.

Feedback is requested on:

Simply put, the Committee wants to put in place guidelines for financial institutions to use when dealing with crypto-assets. These guidelines will allow banks — even those currently prohibited — “to be deemed compliant with any potential global prudential standard” on crypto-assets and related financial technology. 

The Committee certainly sees the attracting of crypto-assets, saying “[the industry’s] absolute size is meaningful and there continues to be rapid developments, with increased attention from a broad range of stakeholders.”

While opinion regarding regulation is both polarizing and multi-faceted, the regulation that is derived from collaboration between all interested parties is certain to function most fairly.

Feedback and comments to the Basel Committee on Banking Supervision’s discussion paper can be made here; responses are due by March, 20, 2020.

The post Crypto-Asset Guidelines to Be Drafted Based on Industry Input appeared first on NewsBTC.

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