BIS to oblige banks to disclose crypto exposure starting 2025

In a consultative document, the Basel Committee said the measures would reduce information asymmetry among banks and market participants.

Financial institutions might soon be required to disclose their exposure to cryptocurrencies. The Basel Committee on Banking Supervision, headquartered at the Bank for International Settlements (BIS), has published a draft guidance on how banks should work with crypto holdings.

The international committee is a conglomerate of bank supervisors from 28 jurisdictions, including powerhouses like the U.S., U.K., and European Union. A consultative document published on Oct. 17 proposed requiring banks to disclose activities “related to crypto assets and the approach used in assessing the classification conditions.”

Under the proposals, banks would also have to disclose information on how they account for classifying exposures to cryptocurrencies, liabilities, and liquidity. Should the Committee agree on the proposal by Jan. 31, 2024, the document will take effect on Jan. 1, 2025.

As crypto.news previously reported, the Basel Committee had always maintained its stance of monitoring and adjusting crypto norms as needed, this is its first overt indication towards separate disclosure norms.

Earlier, the Committee did not mince words, equating the current challenges posed by cryptocurrencies to the “most significant system-wide banking stress” experienced since the 2008 financial meltdown.

In one of its recent reports, the Committee indicated that the now-defunct Signature Bank, which closed its operations on March 12 after depositors withdrew large sums of money, gravely underestimated the risks accompanying its ties to crypto industry deposits.