On 9th of February 2022, the ECON Committee published its report on the proposal for a Regulation as regards the requirements for credit risk, credit valuation adjustment risk, operational risk, market risk and the output floor. One of the main aims of the amendments is to implement prudential requirements of the Basel Committee on Banking Supervision (BCBS) with regard to holding limits for banks’ crypto-asset exposures.

The text mentions crypto-assets, while these were absent from the European Commission text proposal. More precisely:

  • recital 42e establishes that the Commission should follow up on the developments of crypto-assets in the financial markets, meaning that if deemed as appropriate, legislative proposal must be adopted by 31st of December 2024, in order to transpose the different elements of the BCBS standards into EU law.
  • An amendment is proposed about disclosure of exposures to crypto-assets and related activities, which lays out a list of types of information that must be disclosed by institutions in relation to crypto-assets and crypto-asset services, as well as any activities related to crypto-assets.
  • Furthermore, a second amendment is proposed about the prudential treatment of crypto-assets with the aim to have the Commission to submit a legislative proposal by the 30th June 2023 in order to implement a dedicated prudential treatment for exposures to crypto-assets, taking into account both international standards and the Regulation on markets in crypto-assets (MiCA). In the second paragraph of the amendment proposed about the prudential treatment of crypto-assets, it is specified that until 30 December 2024 institutions must apply a 1250% risk weight to their exposures to crypto assets in the calculation of their own requirements.