A report on a draft measure that would require banks that have CRYPTOCURRENCIES set aside a significant amount of capital in an attempt to mitigate possible risk has been published by the European Parliament.

EU lawmakers stated in a notice dated Feb. 9 that any framework that applies to crypto assets should “adequately mitigate the risks of these instruments to the financial stability of institutions.” These lawmakers proposed that banks apply a 1,250% risk weight on their exposure to digital assets, which is one of the highest risk ratings for investments. The regulations were not supposed to take effect until December 30, 2024, according to the bill.

According to the report, “the rapid increase in financial market activity on crypto assets and the potentially increasing involvement of institutions in activities related to crypto assets should be fully reflected in the Union prudential framework,” with the aim of “adequately mitigating the risks of these instruments for the financial stability of institutions.” This recommendation was made in light of the fact that “the rapid increase in financial market activity on crypto assets and the potentially growing participation of institutions in crypto assets “In Given the recent unfavorable events in the crypto-asset markets, this matter is much more urgent than it already was.”

The parliament said the proposed amendment was in line with recommendations made by the Basel Committee on Banking Supervision, also known as BCBS, regarding mitigation of potential risks. The legislators agreed that these guidelines should enter into force before the year 2025.

A vote on the legislation is expected to take place in April. The bill said the European Commission should submit a proposal on the crypto framework by June 30, taking into account the criteria of the EU Markets in Crypto Assets framework, or MiCA. After that, the entire parliament is likely to have the option to vote on whether or not the proposed measure should become law.