The members of the EACB welcome the opportunity to comment on the Basel Committee’s Consultative Document on the prudential treatment of cryptoasset exposures.
Despite the currently limited exposure to cryptoassets across financial institutions, the issue can become extremely relevant very fast. The EACB therefore acknowledges that there is the growing need for a cryptoassets’ market that is framed, with enforceable legal contracts, and clear and transparent regulatory requirements.
In this respect, our key messages are:
• It has to be ensured that the definition of cryptoassets and the prudential requirements set out in the Basel consultation are in line with the regulatory initiatives already under way, for instance the EU regulation on Markets in Crypto-assets (MiCA).
• Regarding the design of a pillar 1 add-on, we do not think it is appropriate to assume a generalised increased operational risk relating to cryptoassets compared to traditional assets; instead the existence of an additional operational risk of cryptoasset exposures should be checked on a case-by-case basis.
• In general, we are not in favor of an application of a 1250% risk weight for high-risk cryptoassets. We propose to compare high-risk cryptoassets to risky or volatile assets already available on the market, for example to speculative unlisted equity exposures with a risk weight of 400%.