Enhancing Transparency: Basel Committee Urges Mandatory Crypto Exposure Reporting for Banks

Updated: 24 April 2024

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The Basel Committee on Banking Supervision, headquartered in Basel, Switzerland, has emphasized the necessity of disclosing banks’ exposures to crypto assets. In a recent consultative document, they stressed the importance of standardized reporting and increased transparency within the cryptocurrency sphere.

The reason why the commitee wants crypto exposure report

The committee has proposed the implementation of mandatory reporting requirements for banks concerning their cryptocurrency activities. These requirements encompass both qualitative and quantitative aspects of their crypto exposures.

Included in the disclosure are details regarding the bank’s involvement in crypto-related activities, as well as information about their exposures to cryptocurrencies and the associated liquidity requirements. Banks are also required to provide insights into how they classify their crypto-related exposures and liabilities.

The Basel Committee has set a target date of January 1, 2025, for the implementation of these disclosure requirements. By standardizing reporting on crypto exposure, the committee aims to foster market discipline and bridge the information gap between banks and market participants.

The committee is actively seeking input from the public, market participants, and those involved in disclosure procedures regarding these proposed requirements. All comments received by January 31, 2024, will be made publicly available on the Bank for International Settlements (BIS) website, unless the respondent explicitly requests confidentiality.

A new Basel Committee consultative document proposes a standardised disclosure table and set of templates for banks’ cryptoasset exposures: comments welcome by 31 January 2024 https://t.co/SzMwXNxuQF pic.twitter.com/0e7lXWspab

— Bank for International Settlements (@BIS_org) October 17, 2023

As the primary global standard setter for the prudential regulation of banks, the Basel Committee plays a vital role in bolstering financial stability. While their decisions do not possess legal authority, they exert significant influence over banking practices and regulations on a global scale.

The Basel Committee on Banking Supervision, initially established in 1974 by central bank governors from what was then known as the G10 countries, operates from the Bank for International Settlements’ headquarters in Basel, Switzerland.