The lawmakers of the European Green Party want to bring international standards by enacting capital requirements for crypto lending services.
European Union (EU) banks serving cryptocurrencies such as Bitcoin (BTC) may face upper limits and high capital requirements as part of the proposed changes in the financial services law published recently.
EU Lawmakers Want to Regulate Banks’ Crypto Transactions
The plans, brought up by Green party MP Ville Niinistö, are now being made in collaboration with the Basel Committee on Banking Supervision as the international standard setter.
According to the plans, detailed in a document dated August 11, crypto assets such as Bitcoin (BTC) that are deemed too volatile or risky will be in the safest possible rating. In fact, this means that banks cannot provide lending services based on virtual assets.
The proposal, which was tabled by the Finnish Member of the European Parliament, states, “An institution’s total assets against Class 2 crypto-asset risks should never be higher than 1 percent of the institution’s Tier 1 capital, which represents the highest quality capital in a bank’s reserves.” took. It also imposed an absolute limit on how much that would be. Banks that provide Bitcoin-based lending will implement this and lenders will be able to hold Bitcoin.
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