Basel Committee on Banking Supervision (BCBS) to Prioritize Cryptos Ahead Of Upcoming G20 Summit
The Basel Committee on Banking Supervision is an international committee formed to develop standards for banking regulation; it is made up of central bankers from 27 countries and the European Union. The BCBS has developed a series of highly influential policy proposals known as the Basel Accords. These are not binding and must be adopted by national policymakers in order to be enforced, but they have generally formed the basis of banks' capital requirements in countries represented by the committee and beyond. Now they want to do a similar thing with cryptocurrencies.
This news comes through a report by the Financial Stability Board (FSB). In the report “Crypto-assets Work underway, regulatory approaches and potential gaps,” prepared for the upcoming G-20 Finance Ministers and Central Bank Governors ahead of their June 2019 meeting, the FSB stated that crypto-assets pose a challenge for the FSB and other international financial standards setters, because there are differing views among FSB members on whether an appropriate multilateral response would require more coordination among international organizations.
The FSB continues to assess that crypto-assets do not pose material risks to global financial stability at present, but that they do raise a number of further policy issues beyond financial stability. Nonetheless, the FSB assesses that vigilant monitoring remains warranted particularly as a variety of new products and services seem to be under development.
The report says:
“Over the past several years, the CPMI has been closely monitoring implications of digital innovations, including digital currencies, tokenization, and distributed ledgers. To that end, the CPMI has been developing analytical reports and frameworks to aid central banks in their assessments, frequently partnering with other SSBs and central bank committees.”
The upcoming G20 is going to be crucial for crypto regulation. We hope that these organizations come around with a good proposal before the event.