Three months after global banking regulators proposed strict new rules for traditional financial institutions seeking bitcoin exposure, JPMorgan, Deutsche Bank, and other banking giants opposed what would require them to set aside one dollar in capital for each dollar of BTC they own.
The strict rules were proposed in June by the Basel Committee for Banking Supervision, a group of regulators from the world’s most prominent financial centers. However, the Global Financial Markets Association, a forum for banks that includes JPMorgan and Deutsche Bank, published together with five other industry associations a letter on Tuesday that pushed against the new regulation, The Wall Street Journal[1] reported.
“We find the proposals in the consultation to be so overly conservative and simplistic that they, in effect, would preclude bank involvement in crypto asset markets,” the associations wrote in the letter to the Basel Committee, according to the report.
The committee’s proposed regulations indeed demonstrated an attempt of regulators to stop or at least disincentivize banking institutions from getting bitcoin exposure. While bank exposures to bitcoin are currently limited, the Swiss-based committee said in June, “their continued growth could increase risks to global financial stability if capital requirements are not introduced,” Reuters[2] reported.
The proposal came amid strong pushback from developing countries against Bitcoin and cryptocurrencies. Central banks of major economies worldwide have been outspokenly negative[3] about such assets while designing their own.
European Central Bank (ECB) chief Christine Lagarde recently came into the spotlight for saying that bitcoin and “cryptos are not currencies, full stop[4].” The head of the ECB later praised her own central bank digital currency (CBDC) in an attempt to drive investors away from Bitcoin and into her soon-to-be-developed digitized euro.
The markets are not buying such
