The Financial Post reports in its Tuesday edition that banks looking to expand into the world of crypto are getting a pointed reminder from regulators of the risks involved.
A Bloomberg dispatch to the Post reports that the Basel Committee on Banking Supervision said it was planning to assign bitcoin, among other crypto products, the toughest capital requirements for any bank that wants to hold it. The standard setters said that the risks to financial stability would be significant if banks do expand their offerings in the volatile market.
On Monday, bitcoin declined about 10 per cent to a two-week low after China announced that it summoned officials from its biggest banks to reiterate a ban on providing cryptocurrency services. It is the latest sign that China plans to do whatever it takes to close any loopholes left in crypto trading.
The warnings come as clients show increased interest in the assets, leaving firms such as JPMorgan Chase & Co., Goldman Sachs Group and Morgan Stanley to wrestle with how best to offer exposure to the burgeoning, and volatile, asset class.
This year has seen more and more lenders examining how they might broaden their offerings even as caution remains the watchword.
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