European Union Lawmakers Moves to Draft Crypto Holding Requirements for Banks
The European Union Lawmakers, through their Economic Monetary Affairs Committee today, has agreed to introduce stiff financial regulation on some financial institutions, especially banks making moves to start banking cryptocurrency assets.
In a memo that was linked to the development, revealed that there is a plan to introduce a global standard that limits the number of crypto assets like Bitcoin and its Ethereum counterpart. They further states that the resolve still stands until they (the parliament) comes out with more practical, comprehensive rules.
Meanwhile, Markus Ferber: the parliament’s economic spokesperson was heard saying in an official statement that all interested banks will be needed to hold a euro for each of every euro worth of crypto they collect.
He gave his reasons to be that it will aid in preventing unstable crypto activities in the country’s financial space. Markus further disclosed that this is a precautionary measure against any form of major loss of funds among individuals, sighting that they (the commission) have witnessed the number of losses investors can incur in the course of investing in crypto.
In another development, “The Association for Financial Markets” an European economic group that stands for the conventional financial practice had shown concern about the proposed amendment. They expressed their fear, saying it may be too audacious to be implemented.
In their statement, they explained that the parliament wasn’t specific with the term “cryptocurrency assets.” The organisation, through an email remark, said that this may lead to a tokenized securities system. In response, the commission stated that the listed points will be resolved in future legislative proceedings.
Economic analysts believe that the latest resolve by the parliament were adopted from the Basel Committee on Banking Supervision, which is the global benchmark for the finance industry.
This Basel Committee document rules that unassured cryptocurrencies should be prioritized because of their extremely risky characteristics. It also proposed that it must be limited to the number of all the bank’s financial instruments issued to customers.
Experts also believed that this could be a challenge, ‘cos to pass such a measure into law, it still needs to be deliberated upon by the EU national finance ministers and approved by the European Parliament.
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