Eternity Law International — News — EU Reaches Deal on Crypto Banking Capital Rules

EU Reaches Deal on Crypto Banking Capital Rules

Published:
July 10, 2023
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The EU has agreed on new rules for virtual currencies in the banking sector, in response to the growing concern over unregulated cryptocoins and their impact on the conservative monetary ecosystem. Lawmakers have successfully advocated for reforms, which include modifications to the CRR/CRD IV. These amendments aim to impose stricter rules governing the operations of crypto assets within Europe’s financial landscape.

This notice was done by ECON via Twitter, following a meeting of EU commissioners and the EP parliamentarians. Moreover, the Council confirmed that the deal also proposes effecting a changeover framework for cryptocurrencies.

The initial proposal outlined a strict attitude, recommending that free-float cryptos carry the highest risk of 1,250%. This would require banking institutions to allocate one EUR of their capitals for each EUR worth of BTC (or other currencies) they have, efficiently persuading them from contributing capital in the cryptomarket. But, during discussions, the Eurocommission introduced a more lenient approach specifically for fixed-priced cryptocurrency like USD or BUSD. This alternative proposal seems to have gained support from EU authorities.

Anticipating Amendments to Rules in 2025

It is important to note that this deal still needs to be approved by the EU Council. As a result, it may undergo an extensive approval process lasting a couple of months. Moreover, the final version will be released concurrently with updated rules for set by the BCBS—the primary global authority responsible for establishing regulatory guidelines for supervision of banking institutions—suggesting potential changes to come into effect in 2025.

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