<p><span style="font-weight: 400">Banks holding crypto will need to follow strict laws to ensure capital requirements, lawmakers decided in a European Parliament committee vote on Tuesday.</span></p> <p><span style="font-weight: 400">An amendment slipped in before the vote proposed that banks should apply a risk-weighting of 1,250% to crypto-assets exposures, Reuters </span><a href="https://www.reuters.com/business/finance/eu-lawmakers-vote-tighter-crypto-esg-rules-banks-2023-01-23/" target="_blank" rel="noopener"><span style="font-weight: 400">reported</span></a><span style="font-weight: 400"> on Monday, to a bill covering financial capital requirements for traditional institutions. </span><span style="font-weight: 400">This means that, when the rules would come into effect, banks will need to be able to cover a complete with capital reserves and not be able to gain leverage. </span><span style="font-weight: 400">The proposed percentage is the highest level of securitization proposed by Basel III reforms </span><a href="https://www.bis.org/bcbs/basel3.htm"><span style="font-weight: 400">set</span></a><span style="font-weight: 400"> by the Basel Committee on Banking Supervision, which sets international banking standards.</span></p> <p><span style="font-weight: 400">The bill further outlines that the European Commission should “review whether a dedicated prudential treatment for crypto assets would be needed and to adopt, if appropriate, a legislative proposal to this end,” according to the draft </span><a href="https://eur-lex.europa.eu/resource.html?uri=cellar:14dcf18a-37cd-11ec-8daf-01aa75ed71a1.0001.02/DOC_1&amp;format=PDF" target="_blank" rel="noopener"><span style="font-weight: 400">report</span></a><span style="font-weight: 400">. </span></p> <p><span style="font-weight: 400">The Switzerland-based group </span><a href="https://www.theblock.co/post/195864/international-banking-regulatory-body-backtracks-on-stablecoins"><span style="font-weight: 400">released</span></a><span style="font-weight: 400"> a report in December proposing new guidance on how banks should manage exposure to digital assets. </span></p> <p><span style="font-weight: 400">EU policymakers will continue referring to the work of the Basel Committee. </span></p><br /><span class="copyright"><p>© 2023 The Block Crypto, Inc. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.</p> </span>