ABA comments on regulatory approach to cryptoasset exposure

The American Bankers Association on Friday submitted comments to the Basel Committee on Banking Supervision concerning prudential treatment of banks’ cryptoasset exposures. The comments were in response to the committee’s request for public input following the release of its second consultation on the subject earlier this year.

The committee has proposed to divide cryptoassets into two broad groups. The first group fulfills a set of classification conditions and is eligible for treatment under the Basel framework with some modifications and additional guidance, including certain tokenized assets and stablecoins. The second category includes assets such as bitcoin that do not fulfill the classification conditions.

ABA stressed that further work was required to inform the policy debate. The association also listed three key principles that should guide supervisory and regulatory approaches: the need to develop a broad understanding of key features in many cryptoassets, a willingness by regulatory and supervisory authorities to permit prudent innovation, and the benefits of conducting a significant share of the cryptoasset market through supervised financial institutions. ABA also stressed the importance of the committee’s goal of “same risk, same activity, same treatment.”