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Parliament's Economic and Monetary Affairs Committee voted to impose strict restrictions on banks that seek to hold cryptocurrencies.
The measures, a leaked version of which was reported by CoinDesk Monday, are a bid to anticipate international norms that would limit the amount of unbacked assets such as bitcoin (BTC) and ether (ETH) lenders can hold before the European Commission proposes more extensive rules.
Pending, "banks will have to hold one euro of own capital for each euro they hold in crypto," markus ferber, the economic spokesman of the greatest political organization in Parliament, stated in a declaration. These prohibitive capital requirements will help to ensure that instability in the world of cryptography does not spread through the financial system.”
"In the last two years, we've seen crypto assets as high-risk investments," he says.
Capital Markets Association of Europe (AFME), a lobby group representing mainstream financial bodies such as investment banks, There's a concern that it's too broad.
"There is no definition of crypto assets in [legislation] and as a result, the requirement may apply to securities that are monetized, as well as non-traditional crypto assets for which provisional processing is intended,' said AFME in an electronic message, request that editorial matters be addressed later in the legislative process.
The move mimics rules set out by the Basel Committee on Banking Supervision, the international standard-setter for the industry, which has proposed that holdings of unbacked crypto should be given the highest possible risk weighting, and also be limited as a proportion of a bank’s total issuance of core financial instruments.
To get on with the business, the measures have yet to be approved by the European Parliament and must also be negotiated with the national finance ministers who meet at the Council of the European Union (eu), within the framework of a more comprehensive set of bank own funds reforms.
