CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.67% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money

BoE’s Woods may front-run rules on banks’ crypto holdings

By Neil Dennis

13:47, 23 September 2021

Cryptocurrencies regulation
Bank of England takes tougher stance on crypto holdings - image: Shutterstock

Bank of England deputy governor Sam Woods said Thursday he was prepared to front-run proposed global rules on banks' holdings of cryptocurrencies.

Global banking regulators under the Basel Committee are in the process of formulating new rules that will prevent banks from building up large exposures to cryptocurrencies that are not adequately backed to cover losses in full.

Conservative approach

Woods told Reuters and the BoE confirmed to Capital.com that, while he didn't want to prevent Britain's banks from taking out investments that make commercial sense, he wanted a more conservative approach when dealing with a volatile and largely unregulated asset class such cryptocurrencies.

He said: “At this point our banks don't have material exposures to crypto but you can see over time, there is an investor appetite and not just retail, also institutional investor appetite to have a little bit of this stuff.”

He added: “We would take a very conservative view on capital treatment, and if necessary, we would therefore front run putting some capital measures in place.”

DOGE/USD

0.47 Price
+14.620% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.0012872

ADA/USD

1.10 Price
+11.550% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 0.00646

ETH/USD

3,422.43 Price
+2.870% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 6.00

BTC/USD

98,926.05 Price
-0.530% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 22:00 (UTC)
Spread 106.00

Banking opposition

Banking industry trade bodies have opposed the Basel Committee's plans, saying that extra capital measures were unnecessary.

The Global Financial Markets Association, whose members include large institutions such as JPMorgan and Deutsche Bank, said in a letter to the Committee on Monday that the proposals were “so overly conservative and simplistic that they, in effect, would preclude bank involvement in crypto asset markets”.

The Basel Committee's proposals were first set out in June. Banking industry and other stakeholders were invited to comment by 10 September. The Committee has yet to announce any timing on when the rules could come into effect following the consultation process.

Read more: BoE holds fast but warns on persistent price pressures

Related topics

Rate this article

Capital Com is an execution-only service provider. The material provided in this article is for information purposes only and should not be understood as investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents and has not been prepared in accordance with the legal requirements designed to promote investment research independence. While the information in this communication, or on which this communication is based, has been obtained from sources that Capital.com believes to be reliable and accurate, it has not undergone independent verification. No representation or warranty, whether expressed or implied, is made as to the accuracy or completeness of any information obtained from third parties. If you rely on the information on this page, then you do so entirely at your own risk.

Still looking for a broker you can trust?

Join the 660,000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading