Yesterday, the European Central Bank (ECB) published a summary of the Basel Committee (BCBS) rules for crypto assets that were published in December 2022. Also, last week, the European Commission published the draft of a Basel rule that says banks should deal with cryptocurrencies. -assets with a risk weight of 1250% as an interim measure until detailed legislation is implemented. The ECB statement implies that banks should not wait for legislation to pass.

“The BCBS standard is not yet legally binding pending its transposition in the European Union,” the ECB wrote. “However, if banks want to participate in this market, they are expected to comply with the standard and take it into account in their business and capital planning.”

The Basel Committee has set a January 2025 deadline for jurisdictions to adopt the crypto asset rules.

In the meantime, the current version of the draft EU rules is expected to be revised, as the 1250% risk weight reference does not differentiate between crypto assets that are compliant security tokens (conventional risk weight) and cryptocurrencies.

In addition, yesterday the ECB published the results of a digital transformation survey of more than a hundred large European banks.

It found that less than 20% of banks are using distributed ledger technology (DLT) solutions, though the figure rises to more than 50% when solutions under development and exploration are included. Crypto-related activities and exposures were considered negligible.