Bank of England Supports Basel Committee Rules on Investment in Cryptocurrencies

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Sam Woods, Deputy Governor of the Bank of England, supported the rules of the Basel Committee, according to which banks are required to have reserves that fully cover their investments in crypto assets.

Recently, European and American banks criticized new
requirements Basel Committee on Banking Supervision of the Bank for International Settlements (BIS), considering that they exclude traditional financial institutions from the cryptocurrency market. However, Sam Woods, Deputy Governor of the Bank of England, disagrees.

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He called the new rules of the committee “quite reasonable”, and said that they would protect banks from many of the risks associated with cryptocurrencies. Banks today do not interact as closely with cryptocurrencies yet. But with the growing demand from retail and institutional investors for cryptoassets, many banking institutions are ready to launch cryptocurrency services for clients. Woods commented on this situation:

“The fact that banks are starting to work with cryptocurrencies is normal. But if digital assets grow into something more, banks must have a “solid foundation” to fully secure their investment in cryptoassets, ”Woods said.

He stressed that the cryptocurrency industry is developing rapidly, but it may take years for banks in the UK, US and European Union to implement the Basel Committee rules. According to Woods, the Central Bank of England would not want to prevent banks from doing what is of commercial value to them, but when it comes to capital investments, it is worth taking a conservative approach. Therefore, the Bank of England expressed its readiness to take the necessary measures that will facilitate the implementation of these rules. Many European banks are demanding relaxation of some requirements, but the Central Bank of England believes that no “indulgences” should be allowed.

“Speaking about the postponement of the rules until January 2023, the question arises, will the banks be able to adapt to them by this time? We are ready to implement international standards and “keep pace with the times,” so there shouldn’t be a big delay, ”Woods said.

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Earlier, the Central Bank of England said that it does not intend to protect commercial banks from the dangers that may arise with the introduction of stablecoins and other cryptocurrencies.

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