A unique study released by the Basel Committee on Banking Supervision shows that the world’s largest financial institutions have around €9.4 billion ($9 billion) in crypto assets exposure. The research paper, authored by Basel Committee Secretariat Renzo Corrias, goes on to explain that cryptocurrency risk is estimated by all banks to be around 0.01% of total risk.
Banks have $9 billion in cryptocurrency exposure, which is approximately 0.01% of the total exposure
A recent study published by the Basel Committee on Banking Supervision (BCBS) explains that the world’s top banks are exposed to around $9 billion worth of cryptocurrencies. The BCBS is a global organization composed of members associated with the world’s central banks and financial institutions from a variety of jurisdictions.
The study, entitled Banks’ Exposures to Cryptoassets – a novel dataset, was authored by Secretary Renzo Corrias. The research aims to create a primary global standard for the “regulatory treatment of banks”. [crypto asset] exposures.”
“In total [crypto asset] The commitments reported by the banks amount to around 9.4 billion euros. In relative terms, these exposures represent only 0.14% of total exposure on a weighted average basis across the sample of reporting banks [crypto asset] Burdens,” describes the report written by Corrias. “Looking at the full sample of banks that were included in Basel III surveillance (ie including those that do not report [crypto asset] exposures), the amount shrinks to 0.01% of total exposure.”
The BCBS shows that 19 banks worldwide submitted data for the research and about 10 financial institutions were from America. Seven banks came from Europe and two banks from the rest of the world. Corrias notes that the banks represent a small subset of financial institutions out of the 182 banks considered by the BCBS for its Basel III surveillance exercise.
The crypto asset exposure reported by banks consisted primarily of Bitcoin (BTC), which accounted for around 31% of exposure, and Ethereum (ETH), which accounted for 22% of exposure. Besides exposure to USD-backed stablecoins, banks are also associated with crypto assets such as xrp (XRP), cardano (ADA), solana (SOL), litecoin (LTC), and stellar (XLM).
Corrias explains that banks’ crypto exposures fall into three distinct categories, including crypto inventory and lending, clearing and market-making services, and custody/wallet/insurance services. Out of the top five activities contributing to banks’ crypto engagement, the top service is “providing custody or wallet services for [crypto assets].”
What do you think of the recent BCBS report on banks’ exposure to crypto assets? Let us know what you think about this topic in the comment section below.
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