EU lawmakers have always shown their desire to control banks’ dealings with cryptocurrencies. They have now taken a giant step towards achieving this goal. EU MEPs have indeed reached an agreement regarding capital requirements for crypto-banks. The latter must therefore comply with the new measures in force.
New requirements for crypto-banks
After flirting with the idea of introducing new restrictions on banks, EU lawmakers have finally managed to put their plan into action. Martin Merlin, Director of Financial Markets at the European Commission, had previously suggested the possibility of an agreement before the end of June. Well, this agreement is now a reality!
And it is the Economic and Monetary Affairs Committee of the European Parliament that brings the information to the attention of the public. She says in a tweet : “The negotiators have reached an agreement on the amendments to the regulation and the capital requirements directive. Details will follow.”
These changes mainly concern the risk assessment of corporate and retail loans by banks. MEP Jonas Fernandez also said the new measures include “setting capital requirements for cryptos to banks.”
According to the legislators, these provisions aim to improve the management of ESG risks by European banks and therefore to avoid future banking crises. The new measures also aim to strengthen the “soundness and resilience of banks operating in the EU” according to Swedish Finance Minister Elisabeth Svantesson.
An agreement in force until the implementation of the Basel III banking reforms
The current deal is transitional according to EU lawmakers. However, before it becomes legislation, it has to be voted on by member states, in the Council of the EU and finally by lawmakers. It will remain in force until the implementation of more in-depth banking reforms, in particular those of Basel III. The Basel Committee on Banking Supervision is currently finalizing the global standards to regulate the exposure of banks to cryptos.
The EU, which recently delayed the publication of its digital euro bill, has therefore just made great progress with this agreement. She who always wanted to limit the crypto activity of European banks.
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