Global banks have reduced their exposure to certain cryptocurrencies by 43.6% over the past year, the Bank for International Settlements (BIS) said Tuesday. According to a report by the Basel Committee on Banking Supervision (BCBS), the total exposure to cryptocurrencies (including direct exposure to cryptocurrencies and exposure through derivatives) will drop from 61.7% in 2021 to 15.4% in 2022.
The change in banks’ crypto exposure was mainly due to fewer banks responding to the BIS survey, but there were other factors such as market conditions and banks’ reduced exposure could be due to the BCBS’s global crypto banking rules, the report said. The sample of participating banks was reduced from 182 to 126. The BCBS approved rules in December that limit banks’ exposure to certain cryptocurrencies by more than 2%.
The committee also suggested that cryptocurrency holdings should be capped earlier in the year in June. The deadline to implement the BCBS’s proposed crypto banking rules is 2025, but data suggests banks are already taking action. Total exposure in the Basel III monitor, the share of crypto exposure “reduced to 0.003% and 0.001% of total exposure, respectively,” the report said.