BASEL, Switzerland—The Bank for International Settlements (BIS) has announced that banks may now retain 2% of their reserves in cryptocurrency.
Until last June, the BIS authorized only a few institutions to keep no more than 1% of their reserves in cryptocurrencies. The announcement was made by the BIS in its recently published Prudential Treatment of Crypto Asset exposure report for December 2022, Coin Culture reported.
As defined in the paper, Group 1 crypto assets consist of both tokenized conventional and digital assets with stabilizing concrete measures. And in Group 2, digital assets don’t fit any categories, Coin Culture said.
According to the report’s recommendations, banks’ financial exposures to Group 2 crypto assets should not exceed 2% of the banks’ Tier 1 capital.
“As a result, the new guidelines permit financial institutions to explore various cryptocurrencies to boost their reserves,” the report added.
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