Prudential treatment of cryptoassets

In June 2022 the BCBS published a document titled Second consultation on the prudential treatment of cryptoasset exposures. This document sets out a draft new section of the Basel Framework, section SCO60: Cryptoasset exposures. This version addresses feedback received from an earlier round of consultation in the latter half of 2021as well as market developments since then.

The draft standards distinguish between Group 1 cryptoassets, assets that meet classification conditions, and Group 2 cryptoassets, those that do not meet those conditions. Capital requirements for Group 1 assets are expected to follow existing Basel requirements with some add-ons whilst higher capital charges would apply for Group 2 assets. Further requirements cover operational risk, liquidity risk, leverage and large exposures as well as setting out expectations with the regards supervisory review and disclosures.

Consultation is open until 30 September 2022 after which the BCBS aims to finalise this new chapter by the year end.

See section 29.1.6 regarding ongoing challenges.