Crypto Targeted For Stiff Banking Regulation

The top global standard setter for banking regulation — The Basel Committee for Banking Supervision, a group of global central bankers and regulators — proposed a strict new rule that would require banks to set aside a dollar in capital for every dollar of bitcoin or other crypto assets they own. Stablecoins (cryptocurrencies pegged to traditional assets) would be subject to lower capital requirements.

The Basel Committee (which includes the Federal Reserve, European Central Bank and other major central banks) gave banks until September 10 to respond to the proposal. Importantly, the committee doesn’t enforce rules; it sets standards that regulators around the world agree upon and implement locally.

This kind of proposal has been predicted by crypto experts for quite some time, so it may not have much impact on the way the DeFi community thinks about its relationship with traditional banking systems. There are two schools of thought: 1) This is great for business, as the proposed regulation further illustrates the need for DeFi. 2) This is terrible for business because of the increased friction between the DeFi and fiat currency worlds.

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