according to materials from the website - By Yellow News
The European Banking Authority has issued new guidelines for managing risks related to crypto assets for EU banks
On Tuesday, the European Banking Authority published comprehensive guidelines requiring banks across the European Union to implement stricter capital requirements and detailed risk management protocols related to cryptocurrency assets. These regulations, published as a final draft of regulatory technical standards under the Capital Requirements Regulation, mark an important step towards standardizing the operation of financial institutions with digital assets across all 27 member countries of the bloc.
The new guidelines from the European Banking Authority establish uniform capital requirements for banks holding crypto assets, eliminating the regulatory uncertainty that previously hindered participation by institutional investors. Banks are now required to implement strict risk models that consider credit risk, market risk, and counterparty credit risk when dealing with digital assets. These guidelines align with the EU Regulation on Markets in Crypto-Assets (MiCA) and provide regulatory clarity for institutions seeking to enter cryptocurrency markets. The regulations take into account the growing interest of institutional investors.
The publication from August 5 was the result of months of consultations during which European banks expressed increasing interest in cryptocurrency-related services. Financial institutions are exploring the possibilities of using their functions as custodians of digital assets, issuers of cryptocurrency-backed products, and providers of trading and credit services for clients.
"Institutions are showing increasing interest in engaging in activities related to crypto assets," said the European Banking Authority (EBA). The management explains this trend by potential new sources of income and competitive pressure in the banking sector.
According to the recommendations, banks must calculate and aggregate risks related to crypto assets using standardized methodologies. This approach ensures uniform application of prudential rules across all EU member states, eliminating the fragmentation of national regulations that previously complicated cross-border operations.
Banks that previously hesitated to enter cryptocurrency markets due to regulatory uncertainty now have clear operational parameters. This system provides institutional confidence while maintaining the strict oversight that European regulators deem necessary for financial stability.
Implementation standards and risk management requirements
The technical standards define detailed procedures for institutions to assess their risks related to cryptocurrencies. Banks must develop comprehensive risk models that take into account various categories of potential losses associated with holding digital assets.
Assessing credit risk requires banks to evaluate the likelihood of default by counterparties in cryptocurrency transactions. Market risk calculations must account for the known price volatility of digital assets. Counterparty credit risk models must consider the unique characteristics of cryptocurrency trading platforms and custodial service providers.
"RTS addresses implementation aspects and will ensure the harmonization of capital requirements regarding crypto assets applied by institutions across the EU," explained the European Banking Authority (EBA). These technical requirements represent some of the most detailed rules regulating cryptocurrencies among all major financial jurisdictions.
The system establishes minimum capital buffers that banks must maintain in relation to their cryptocurrency positions. These requirements are in line with international banking standards and take into account the specific risks associated with digital assets.
ESMA introduces standards for staff competence
Alongside institutional recommendations from the EBA, the European Securities and Markets Authority has published new requirements for the competence of staff in cryptocurrency companies. These standards ensure that employees providing advice or information about digital assets possess sufficient knowledge and training.
ESMA's recommendations are based on a February consultation document that identified gaps in staff knowledge in the cryptocurrency sector. The authority emphasized that proper staff training enhances investor protection and strengthens trust in digital asset markets.
These standards for employees complement the institutional framework, covering human capital requirements alongside financial regulation. This combined approach reflects a comprehensive strategy by European regulators for overseeing cryptocurrencies. The competence requirements align with MiCA provisions and establish minimum knowledge standards for individuals working with clients in the cryptocurrency sector.
The Capital Requirements Regulation (CRR) is the cornerstone of European banking supervision, establishing minimum capital standards for financial institutions. These rules ensure that banks have sufficient reserves to cover potential losses while continuing operations.
The Regulation on Markets in Crypto-Assets (MiCA) is comprehensive EU legislation on cryptocurrencies, covering all aspects from the issuance of stablecoins to the licensing of exchanges.
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