Exaggerated over-reserves – When it comes to putting on truncheons in the streets crypto industry innovations, European Union lawmakers always answer presentnotwithstanding the regulations Mica. The best example to date concerns a obligation guarantee reserves in the total capital disproportionate for banks that would dare to own Bitcoin or other crypto-assets.
Fractional reserves in euros yes, but for Bitcoin no (and even the reverse)
When we dare not prohibit frontallywould we seek to kill by regulatory suffocation ? This is really what we can see when we see the last reflections of certain issues from the European Parliament, concerning the supervision of cryptocurrencies in the banking sector.
This is a press release published on January 24, 2023, for the Economic and Monetary Affairs Committee (ECON), which worries about the new European cryptosphere. This same commission, do not join a part of the available members narrowly failed to ban mining Bitcoin (and all Proof of Work/PoW based cryptos).
Never short of ideas for slow adoption decentralized cryptocurrencies, a majority of ECON members this time I voted for new restrictions for banks holding (or wishing to hold) digital assets. If you text that the committee pre-adopted was also to be adopted by the plenary session of the European Parliament, these banks would have to hedge their crypto holdings to the tune of a surreal capital reserve of up to 1,250% counterpart. A sacred weighting of risks!
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1 million euros of cryptos = 12.5 million euros of cover: precisely?
If European banks cannot afford to euro fractional reservesthat is to say, not having enough euros if the customers claimed them all at the same time, for Bitcoin and cryptocurrencies, it is the exact opposite.
Complies perfectly with “Proposals” of the Basel Committee December 2022, MEPs therefore added a amendment imposing on banks that any value held in cryptocurrencies should potentially be hedged up to 12.5 times a few other assets.
After ECON communication, EU lawmakers also happy with bankers “disclose their exposure to crypto-assets”. So many restrictions that will certainly encourage European bankers to take an interest in Bitcoin and cryptocurrencies (pardon the sarcasm).
The Economic and Monetary Affairs Committee is expected to submit a legislative proposal “by June 2023” this south “cautious behavior” I reserved for crypto-assets. At this pace of restrictive regulations, there may not be any left more crypto sector to be framed in Europe, therefore this jurisdiction will become uncompetitive in relation to others less heavily restrictive (see downright crypto-friendly).
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