The first research paper published by the Basel Committee on Banking Supervision details that the world’s largest financial institutions are exposed to approximately €9.4 billion (US$9 billion) in crypto assets. The research paper, authored by Renzo Corrias of the Basel Committee secretariat, further explains that cryptocurrency exposure is estimated to be about 0.01% of a bank’s total risk exposure.
Banks’ cryptocurrency exposure is $9 billion, or roughly 0.01% of their total risk exposure
A recentstudypublished by the Basel Committee on Banking Supervision (BCBS) explains that the world’s top banks are exposed to approximately $9 billion worth of cryptocurrencies The BCBS is a global organization whose members are tied to central banks and financial institutions in countless jurisdictions
The study, called “Banks’ exposures to cryptoassets – a novel dataset,” was written by Renzo Corrias of the Secretariat. The study aims to create a leading global standard for “prudential treatment of banks’ [cryptoassets] exposures.”
“The total [crypto asset] exposure reported by banks amounts to approximately €9.4 billion. In relative terms, these exposures represent only 0.14% of the total exposures on a weighted average basis across the entire sample of banks reporting [crypto asset] exposures,” the report written by Corrias elaborates.” When considering the entire sample of banks included in the Basel III monitoring exercise (i.e., even those that do not report [crypto asset] exposure), the amount is reduced to 0.01% of total exposure.”
According to the BCBS, 19 banks worldwide submitted data for the survey, with about 10 institutions originating from the Americas; seven were from Europe and two from other regions. Collias noted that of the 182 banks considered by the BCBS for Basel III monitoring, these are a small group of financial institutions.
The crypto asset exposures reported by the banks were primarily inBitcoin (BTC)which accounted for about 31% of their exposure, andEthereum (ETH)which accounted for 22% of their exposure. In addition to exposure to USD-backed stablecoins, banks are also associated with crypto assets such as xrp (XRP), Cardano (ADA), Solana (SOL), Litecoin (LTC), Stellar (XLM)
Corrias explains that banks’ exposure to crypto consists of three distinct categories, including crypto holdings and financing, clearing and market-making services, and custody/wallet/insurance services. Of the top five activities of a bank’s crypto exposure, the top service is “providing custody or wallet services for (crypto assets).”
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