The research paper written by the Basel Committee Secretariat, Renzo Corrias, further explains that out of the total risk exposure of banks, the exposure to crypto-currencies is estimated to be around 0.01% of the total exposure.
Banks have $9 billion of exposure to crypto-currencies, which equates to about 0.01% of total risk exposure.
A recent study published by the Basel Committee on Banking Supervision (BCBS) explains that the world’s major banks have about $9 billion in crypto-currency exposure. The BCBS is a global organization made up of members linked to central banks and financial institutions around the world from a myriad of jurisdictions.
The study, titled “Banks’ exposures to cryptoassets – a novel dataset“, was authored by the Renzo Corrias Secretariat. The research aims to create a primary global standard on “ prudential treatment of banks”. [crypto asset] of banks“.
“The total [crypto asset] The exposures reported by the banks amount to approximately €9.4 billion. In relative terms, these exposures represent only 0.14% of total exposures on a weighted average basis in the sample of reporting banks. [crypto asset] exposures“, details the report written by Renzo Corrias. “Considering the entire sample of banks included in the Basel III monitoring exercise (i.e., also those that do not report [crypto asset] exposures), the amount reduces to 0.01% of total exposures.“
BCBS reports that 19 banks around the world submitted data for this research, and about 10 financial institutions were from the Americas. Seven banks were from Europe, and two banks were from the rest of the world. Renzo Corrias notes that the banks represent a small group of financial institutions out of the 182 collective banks that BCBS considered for its Basel III monitoring exercise.
The crypto-asset exposure reported by banks is mainly composed of the following bitcoin which accounted for about 31% of exposures, and ethereum which accounted for 22% of exposures. In addition to exposure to stable currencies backed by the USD, banks are also associated with crypto-assets such as XRP, cardano, solana, litecoin, and stellar.
Renzo Corrias explains that banks’ exposure to crypto-currencies consists of three different categories, namely crypto-currency holdings and loans, clearing and market-making services, and custody/portfolio/insurance services. Of the five activities that increase banks’ exposure to crypto-currencies the most, the top service is “The provision of custody or portfolio services for [crypto assets].“