Bank for International Settlements said The entire exposure of global banks to crypto is 0.01%
Global usage of cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH) is increasing, but global banks’ exposure to digital assets is still relatively low, according to a recent analysis by the Bank for International Settlements (BIS).
The Basel Committee on Banking Supervision (BCBS) of the BIS indicated in its Basel III Monitoring Report issued on September 30 that the total cryptocurrency exposures disclosed by banks throughout the world amount to about €9.4 billion ($9.18 billion).
According to the research, this puts the total exposure to digital assets around 0.14 percent of the total exposures “on a weighted average basis across the sample of banks reporting cryptoasset exposures.”
Furthermore, the international financial organization stated: “When taking into account the whole sample of banks engaged in the Basel III monitoring exercise (including those that do not declare cryptoasset exposures), the proportion decreases to 0.01% of overall exposures.”
In addition, the analysis discovered that crypto assets were “unevenly dispersed among banks, with two banks accounting for more than half of all cryptoasset exposures and four other banks accounting for just under 40% of the remaining exposures,” as seen in the chart.
In its consultative paper titled “Second consultation on the prudential regulation of cryptoassets,” published by Finbold, the BCBS proposed restricting banks’ overall exposures to “Group 2 cryptosassets to 1% of Tier 1 capital” in late June.
BIS reiterated its crypto pessimism earlier in June by voicing concerns that “crypto cannot fulfil the societal purpose of money.” And that the big crypto sell-off at the time suggested that its warnings about the hazards of decentralized finance had come true.