The Bank for International Settlements (BIS) agrees with banks keeping 1% of reserves of digital currencies and Bitcoin. Adding to this, the banks can now help struggling industries.
The Bank of International Settlements (BIS) is an international financial institute which is owned by the Central Bank. It financially supports and cooperates just like any other bank for the Central Bank.
BIS is located in Basel, Switzerland and has offices in Hong Kong and Mexico City.
Moreover, Bank of International Settlements is a 92 years old financial supporter which extends its helping hands to the crypto market.
Additionally, BIS’ Basel Committee on Banking Supervision June 30, report advised the banks to cover 1 percent of their core capital.
The BCBS have classified crypto assets in two groups. The crypto assets which do not meet criteria are classified into Group 2. And the crypto which meets the criteria, are classified in Group 1.
Moreover, the Group 2 crypto assets include stablecoin, unbacked crypto assets, and tokenized traditional assets which didn’t meet the criteria. And Group 1 crypto assets include those which meet the BCBS criteria.
Also, the document states that a bank’s exposure to these crypto-assets (Group 2) must never be over 1 percent of its core capital at any point in time. This requirement is part of the BCBS standards and aligns with the Basel framework, BCBS documents.
Additionally, the committee also suggests that the new exposure limit for other Group 2 crypto assets, the large exposure limit, does not apply. However, the BIS will review this 1 percent limit now and then.
