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By Huw Jones
LONDON, June 7 (Reuters) - The Basel Committee on Banking
Supervision will consult on how lenders should shield themselves
from crypto assets, the global banking watchdog said on Monday,
as regulators turn up the heat on a growing but risky investment
sector.
"The committee agreed to publish a consultation paper to
seek the views of external stakeholders on the design of
prudential treatment of banks' exposures to cryptoassets," the
Swiss-based watchdog said in a statement.
Prudential rules force banks to assign "risk weightings" to
each type of asset such as loans or derivatives, which are then
added up to determine how much capital should be held.
The crypto-assets sector has grown rapidly but bitcoin
has cooled from a high of $64,895.22 in mid-April to
$36,005 on Monday after China began signalling a crackdown.
The committee, made up of regulators from the world's main
financial centres, said it discussed crypto-assets last Friday.
"While banks' exposures to crypto assets are currently
limited, the continued growth and innovation in cryptoassets and
related services, coupled with the heightened interest of some
banks, could increase global financial stability concerns and
risks to the banking system in the absence of a specified
prudential treatment," it said.
The committee will publish its consultation paper this week.
HSBC, Europe's biggest bank, told Reuters last
month that is had no plans to join rival lenders such as Goldman
Sachs in launching a cryptocurrency trading desk or
offering the digital coins, saying they are too volatile and
lack transparency.
The Bank of England has said investors should be prepared to
lose all of their money if they invest in crypto assets.
(Reporting by Huw Jones; editing by David Evans and Jason
Neely)
