The Basel Committee on Banking Supervision (BCBS) published its final disclosure framework for banks’ crypto asset exposures as well as targeted amendments to its crypto asset standard to tighten the criteria for certain stablecoins to receive a preferential regulatory treatment. Both standards are to be implemented by 1 January 2026.
The final disclosure framework includes a set of standardized tables and templates covering banks’ crypto asset exposures. These require banks to disclose qualitative information on their crypto asset-related activities and quantitative information on the capital and liquidity requirements for their crypto asset exposures. The use of common disclosure requirements aims to enhance information availability and support market discipline.
The targeted amendments to the crypto asset prudential standard aim to further promote a consistent understanding of the standard, particularly regarding the criteria for stablecoins to receive a preferential “Group 1b” regulatory treatment.
Group 1 crypto assets “meet in full a set of classification conditions”, and include tokenized traditional assets (Group 1a) and crypto assets with effective stabilization mechanisms (Group 1b). Group 1 crypto assets are subject to capital requirements based on the risk weights of underlying exposures as set out in the existing Basel Framework.
SFTs included
The final standard permits cash receivable under reverse repurchase agreements to be included in Group 1b stablecoin reserves, according to the amendments. Banks must apply the comprehensive approach formula set out in the credit risk mitigation section of the standardised approach to credit risk.
Only Group 1a crypto assets that are tokenized versions of the instruments included on the list of eligible financial collateral qualify for recognition as eligible collateral.
Group 1b, Group 2a and Group 2b crypto assets are not eligible forms of collateral in the comprehensive approach and therefore when banks receive them as collateral they will receive no recognition for the purposes of the net exposure calculation to the counterparty. As with all non-eligible collateral, banks that lend Group 1b, Group 2a or Group 2b crypto assets as part of an SFT must apply a haircut of 30%.