The European Union (EU) reached a political agreement on new bank capital legislation on Tuesday after lawmakers sought “prohibitive” rules to prevent unsecured cryptocurrencies from entering the traditional financial system.
The political agreement, which also introduces sweeping and controversial changes to the way banks assess risk in business and home loans, must now be voted on by member states and lawmakers in the EU Council to become legislation, a process that may actually require many months.
International standard-setters at the Basel Committee on Banking Supervision are currently finalizing the content of the global rulebook for cryptocurrency banks. But the details that have been published suggest that the maximum possible risk weight of 1,250% is assigned to free-floating cryptocurrencies.