The Basel Committee on Banking Supervision met virtually on 5 and 7 December to discuss a range of policy and supervisory initiatives.

The Committee took stock of its review of various elements of the prudential standard for banks’ exposures to cryptoassets published in December 2022.

It agreed to consult on potential targeted revisions related to the criteria for stablecoins to receive a preferential regulatory treatment. The Committee will also consult on various technical amendments to help promote a consistent understanding of the standard.

The Committee concluded that cryptoassets that use permissionless blockchains create risks that cannot be sufficiently mitigated at present and therefore agreed to retain the existing treatment for such cryptoassets. A consultation paper about that topic will be published this month.

The Committee also reviewed the risks arising from banks providing cryptoasset custody services. Such services raise various operational risks for banks, which reinforces the importance of full implementation of the Principles for operational resilience and those for the sound management of operational risk.

The Committee will continue to monitor the evolution of banks’ cryptoasset custody activities and, taking account of market developments, will consider whether any additional work may be needed.

Featured image credit: edited from Freepik