The Bank for International Settlements (BIS), also known as the ‘central bank of central banks’, released a report this Tuesday (29) on the annual meeting of banking supervisors.
The International Conference of Banking Supervisors (ICBS), which took place virtually, was attended by the President of the Central Bank of Spain, Pablo Hernández de Cos, who spoke about digitalization in banks.
In one of the discussed points Hernández spoke about the “crypto asset” market and stressed that it can pose a risk to all banks.
“What we can say with confidence is that such markets have the potential to scale rapidly and pose risks to individual banks and overall financial stability.said the president of the Central Bank of Spain.
BIS is preparing new rules for banks with exposure to cryptocurrencies
According to the report, the Basel Committee has identified more than 20 banks that are directly or indirectly exposed to cryptocurrencies. In this sense, Hernández proposes regulation with a “prospective” approach.
He also noted that banks’ current cryptocurrency exposures are relatively low, representing less than 0.15% of total exposures. But that’s enough to create rules.
“We need to take a forward-looking approach to regulate and oversee them”, said Hernandez. “For this reason, the commission will publish its final prudential standards for bank crypto-asset exposures in the coming months,” locked.
While cryptocurrency adoption is high in some countries, including Spain, there is still some friction due to the regulation of these markets.
Moreover, despite the Spanish Congress having a clearer view on crypto assets, financial entities still recognize these digital assets as high risk.
Governor of the Bank of Spain believes that cryptocurrencies pose a risk to financial stability
Recently, Pablo Hernández de Cos commented on the events that transpired in connection with the bankruptcy of FTX, then the third largest cryptocurrency exchange.
In his statement, he said the event shows that there is danger in the cryptocurrency market and that it should be a lesson to all citizens about these ‘products’.
Hernández stressed that the FTX situation is a testament to the risks associated with that market, “which have always existed.” Furthermore, he noted that regulators should give people sufficient notice before investing in cryptocurrencies.
Source: Live Coins
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
