In The Money with Tom ‘PredPoker’ Parsons | PSPC 2023 | PokerNews
After a nervous couple of hours hand to hand, we caught up with platinum pass…
Major banks in Europe and the United States are opposing a set of strict rules that are aimed at crypto holdings. In a proposal done in June by a group of global central bankers and regulators known as the Basel Committee for Banking Supervision (BCBS), bankers would require to set aside a dollar in capital for every dollar of Bitcoin they would hold.
The Global Financial Markets Association, which includes JPMorgan Chase and Deutsche Bank and 5 industry associations, published a consultative letter this week, arguing that cryptocurrencies such as Bitcoin should not be subject to such tight requirements.
The argument, banking regulators make for tighter control have always been the same and time and again been debunked; regulate in order to battle money laundering and terrorism financing.
Harsh rules, the banking association argues, would prevent them from holding crypto assets and would actually push this activity into unregulated areas. The letter of the GFMA stated:
“We find the proposals in the consultation to be so overly conservative and simplistic that they, in effect, would preclude bank involvement in crypto asset markets,”
Originally proposed in June, the Basel Committee, of which the U.S. Federal Reserve and the European Central Bank are part of, is convinced that banks should apply a 1,250% risk weight to Bitcoin.
Furthermore, the committee added that this is “similar in effect to the deduction of the asset from the capital.” Effectively, a bank holds $100 in BTC, with a risk-weighted asset value of $1,250, would have to set aside at least $100 in cash when considering the minimum capital requirement for banks of 8%.
Kenneth E. Bentsen, Jr., Chief Executive Officer of GFMA, said:
“The Consultation would effectively preclude banks from being involved in the crypto assets sector, by making it economically prohibitive to do so. We believe DLT and blockchain can drive efficiencies and help customers, and we see value in delivering those benefits through banks, where there will be transparency, rather than pushing that activity to the unregulated sector. There is a need for regulation in this space, and an equal need for it to be more balanced than what has been proposed. We believe the Consultation should be adjusted, and the existing risk framework employed, to allow that to happen.”
The post Major Banks Oppose New Rules on Crypto Holdings appeared first on iGaming.org:.
Go to Source
Author: Peter Siu