Bitcoin price shoots up after global regulator proposes first ever rules for banks to hold crypto

Bitcoin has been formally recognized as an asset class by the Basel Committee, the regulator of international banking standards, which proposes to introduce capital regulations for the cryptocurrency.

The news was followed by an immediate increase in the price of bitcoin, rising to around $2,000 following the announcement.

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The global banking regulator has classified bitcoin as a high-risk asset, proposing a risk weight of 1,250 percent, but it marks another major milestone for bitcoin in the world of traditional finance.

Proposal, published Thursday, distinguishes between cryptocurrencies – such as bitcoin and Ethereum (ether) – and so-called stable coins such as Tether, which are backed by fiat reserves such as the US dollar.

While banks’ exposure to cryptocurrencies is currently limited, continued growth and innovation in cryptocurrencies and related services, coupled with increased interest from some banks, may increase risk in the face of global financial stability concerns and the absence of specific prudential treatment for the banking system. are, the Basel committee said.

“Given the rapidly evolving nature of this asset class, the Committee considers that policy development for cryptoasset exposure is likely to involve more than one consultation.”

The news comes just a day after El Salvador became the first country in the world to formally recognize bitcoin as legal tender.


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