Global banking regulators are proposing a standardized disclosure framework for banks’ cryptoassets.
The Basel Committee on Banking Supervision published a consultation paper that proposes a disclosure table and a series of templates for reporting banks’ crypto holdings.
The effort to standardize crypto disclosures is intended to “support the exercise of market discipline and help to reduce information asymmetry between banks and market participants,” the umbrella group of bank regulators said in a release.
“Under the proposals, banks would be required to disclose qualitative information on their activities related to cryptoassets and quantitative information on exposures to cryptoassets and the related capital and liquidity requirements,” it said.
Additionally, banks would have to detail the accounting classifications of their exposures to both cryptoassets and cryptoliabilities.
The proposal, which is out for comment until Jan. 31, 2024, also seeks feedback on measures to address the risk of window-dressing by banks in reporting their crypto exposures and asks whether regulators should define what should represents a “material” exposure.
The requirement to report crypto exposures as part of the Basel capital regime is slated to take effect on Jan. 1, 2025.