Make Kitco Your Homepage

A Basel banking committee has put bitcoin under the highest risk category

Kitco News

Editor's Note: With so much market volatility, stay on top of daily news! Get caught up in minutes with our speedy summary of today's must-read news and expert opinions. Sign up here!

(Kitco News) -  Bitcoin has been put under the microscope by The Basel Committee on Banking Supervision (BCBS) this morning. According to the BIS website, committee is the primary global standard-setter for the prudential regulation of banks and provides a forum for regular cooperation on banking supervisory matters.

The committee has said that banks will need to set aside enough capital to cover any losses in Bitcoin in full if they decide to offer the cryptocurrency to clients. That puts Bitcoin in the highest risk category in terms of bank capital exposure. In practice, this means that banks may need to hold a dollar in capital for each dollar worth of Bitcoin holdings, based on the 8% minimum capital requirement that is.

Due to their less volatile nature, the treatment of stablecoins will be in line with assets such as stocks, bonds. The proposal is not set to take effect just yet as the Basel Committee is looking for some feedback and public comment. It has been noted that these policies may change several times as the market evolves. This could allow some room for tokens to perhaps see lower capital requirements.

That is not all the crypto news this morning. ForUsAll Inc., a 401(k) provider in the U.S., announced a deal with the institutional arm of Coinbase Global Inc., a leading cryptocurrency exchange, that will allow workers in plans it administers to invest up to 5% of their 401(k) contributions in bitcoin, ether, litecoin, and others.

Executives at ForUsAll have not said how many of the firm’s 400 employer clients have signed up for the cryptocurrency platform as of yet. Founded in 2012, the company provides automated 401(k) administration, menus of low-cost mutual funds, and access to human advisers. A big move in the space and it means the crypto industry could be tapping into the pensions market. 


Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.