EU Decides on Strict Crypto Rules

In December, the Basel Committee of banking regulators released suggestions for the international financial institution.

The global digital asset market is now looking for regulatory direction from all governments and authorities as a result of several setbacks it suffered in 2022. On Tuesday, the European Parliament's economic affairs committee will vote in an effort to bring clarity to the cryptocurrency market.

Will Basel III regulations be put into effect?

According to sources, the European Union will vote on concessions reached across parties. It is a draught law that will aid the authorities in putting Basel III's final components into effect. Basel III is a collection of policies that world leaders have agreed to. These regulations were created by the Basel Committee in response to the 2007–2009 financial crisis.

This implies that the banks would need to set aside punitive capital amounts used to pay for their holdings of digital assets. Financial institutions would have to give crypto exposures a risk weighting of 1,250% of capital, according to one of the law's modifications. They will be able to cover a loss by doing this.

In December, the Basel Committee of banking regulators released suggestions for the international financial institution. However, the revisions would also give a peek of shadow banking if the EU approves the draught law.