The European Banking Authority (EBA) completes the draft technical standards, requiring banks to apply a 1,250% risk factor for Bitcoin and Ether.
The European Banking Authority (EBA) has completed the final draft technical standards, establishing one of the strictest global capital requirements for banks holding unsecured crypto assets like Bitcoin and Ether. If approved, this ruleset will restructure the financial sector's activities and create significant barriers for participants in the digital asset market.
Under the new regulatory framework, assets like Bitcoin are classified in Group 2 and subject to a risk factor of up to 1,250%. This mechanism requires banks to maintain capital nearly equivalent to the value of crypto assets on their balance sheets. The regulation also prohibits risk offsetting between crypto assets, meaning a Bitcoin long position cannot be hedged by an Ether short position.
The impact of the rule is clearly illustrated by a specific example: Italy's Intesa Sanpaolo bank with a 1 million euro investment in Bitcoin may need to maintain up to 12.5 million euros of Tier 1 capital to secure this exposure.
The high capital requirements aim to prevent systemic risks but significantly reduce the attractiveness of holding digital assets for European banks. This encourages institutions to move activities off their balance sheets or to specialized subsidiaries, similar to Revolut's model.
Europe's strict stance sharply contrasts with trends in other financial centers. In the US, agencies like FDIC are showing a more open attitude, while large banks like JPMorgan are reportedly considering crypto asset-backed financial products.
Similarly, Switzerland has proactively adjusted legislation to allow banks to safely custody tokenized securities. The choice of a cautious and distinct approach may risk the EU falling behind in the financial innovation race, limiting the competitiveness of regional banks in the global digital asset market.
