Central banks will be able to gradually integrate crypto into their reserves from 2025, up to a maximum of 2%, according to new prudent regulations published by the Bank for International Settlements.
Central Banks open the door to crypto
The cryptographic revolution is now at the very heart of the traditional banking system. Indeed, central banks around the world are preparing to integrate crypto into their balance sheets, in accordance with new guidelines from the Bank for International Settlements (BIS).
From 2025, these ultimate guardians of the international monetary order will be able to hold up to 2% of their colossal foreign exchange reserves in Bitcoin, Ethereum and other altcoins. A first which bodes nothing less than an earthquake on the markets.
However, this still timid adoption of cryptoassets will take place gradually and strictly supervised. The Basel Committee on Banking Supervision, which regulates central banks, published a detailed framework to prevent any excessive enthusiasm by these ultra-conservative institutions. Thus, he classified cryptos into two groups, with different risk levels and regulations.
On the one hand, “wise” cryptos such as stablecoins backed by traditional currencies and security tokens, in which central banks will be able to invest without limitation. On the other, more volatile and speculative cryptos like Bitcoin, capped at 2% of reserves, or even 1% if their technical infrastructure raises doubts.
Furthermore, the Basel Committee has established several safeguards to limit risk-taking by central banks. For example, it subjects the integration of stablecoins to rigorous tests that control their mode of issuance, their governance and their redemption mechanisms. Additionally, increased supervision of central banks aims to ensure that they properly classify their digital assets.
Towards an overhaul of the international monetary system?
Although prudent, this decision remains revolutionary. For the first time, the guardians of the international monetary order are opening the doors of traditional finance to crypto innovation.
Certainly, initially, the impact on crypto prices should be limited. However, in the long term, the arrival of central banks, with their colossal budgets, could completely transform and calm this digital Wild West.
Above all, in the long term, this adoption testifies to a true Copernican revolution. Indeed, decentralized finance is, step by step, but surely, intruding into the very heart of the banking system, right up to the holy of holies that are the central banks.
The latter seem to have decided that if they cannot defeat crypto, they might as well gradually appropriate it. A strategy that heralds a profound change in global financial dynamics.
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