Banking Supervisory Committee Reports Risks In Crypto Sphere
The Basel Committee on Banking Supervision has set standards for organizations that intend to work with cryptocurrencies and warned of the risks that exist in the crypto sphere, Finextra reports.
The Committee, which operates under the Bank for International Settlements, warns financial institutions about threats from the crypto sphere, advises to ensure security, and conduct a thorough analysis before starting work in this direction.
Analytical information should include the amount of equity capital of a banking institution and the ability to provide liquidity, the Committee experts believe, while banks should inform regulatory organizations about plans to work with digital assets.
The Committee warns that the spread of cryptocurrencies is a bad sign for the traditional financial system. There are many negative aspects associated with digital assets. Questions concerning liquidity, lending, and operating work arise constantly. Illegal actions of crypto fraudsters, money laundering, etc can be mentioned too. A large number of crypto platforms threatens the stability of the banking system.
Despite the opinion of the Committee representatives, Switzerland is a country quite loyal to blockchain and cryptocurrencies.
Earlier, Daniel Haudenschild, the President of the Swiss Crypto Valley Association (CVA), suggested that the state should be more open to the crypto sphere.