Basel Committee Issues Proposal for Crypto Disclosure in Global Banking

International banking regulators are suggesting a standardized framework for banks to disclose their crypto assets. The Basel Committee on Banking Supervision has released a consultation paper introducing a disclosure table and various templates for banks to report their crypto holdings.

According to the group of bank regulators, the objective of standardizing crypto disclosures is to “support the exercise of market discipline and help to reduce information asymmetry between banks and market participants.”

As per the proposal, banks would be mandated to provide qualitative information concerning their activities related to crypto assets, along with quantitative information on their exposures to crypto assets, and the corresponding capital and liquidity requirements. Furthermore, banks would need to specify the accounting classifications of their exposures to both crypto assets and crypto liabilities.

The proposal, currently open for public feedback until January 31, 2024, also solicits input on measures to counter the risk of window-dressing by banks when reporting their crypto exposures. Additionally, it seeks opinions on whether regulators should define what constitutes a “material” exposure.

The requirement to report crypto exposures within the Basel capital regime is scheduled to come into effect on January 1, 2025.