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Seeking Alpha 2022-10-01 15:18:00

Banks' cryptocurrency exposure sits at only 0.1%, study shows

The total cryptocurrency exposures reported by 19 predominantly U.S. banks represented 9.4B euros ($9B), or a just 0.14% of total exposures, according to a recent study by the Basel Committee on Banking Supervision, the primary global standard setter for banking regulations. That figure shrank to 0.01% across all 182 banks considered for the exercise, including those that did not report crypto exposure. The study was based on a new crypto data collection template sent to a number of banks and designed to support the committee’s two documents on the prudential treatment of banks’ cryptoasset exposures it published in June 2021 and June 2022. Those two documents refer to the Basel Committee's efforts to toughen rules that would determine how depository institutions could enter crypto.The primary crypto exposures featured bitcoin (BTC-USD) (31%) and ethereum (ETH-USD) (22%) as well as other instruments based on those tokens (35%), the study found. The reported exposures spanned an array of crypto-linked banking activities, such as clearing, lending, custody and market making. Most banks provided crypto custody or wallet services, followed by client trading of cryptos or crypto derivatives. Given the speediness of the crypto market evolution, it's hard to discover whether some banks have under- or over-reported their crypto exposures. With that being said, the results of the study, "while they are helpful in providing a broad indi...

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