The Group of Central Bank Governors and Heads of Supervision (GHOS), the supervisory body of the Basel Committee on Banking Supervision, has just set a new deadline for the implementation of its prudential standard for the banks’ crypto-asset exposures. The first expected finish date is January 2025, but the deadline has been postponed to January 1, 2026.

Consequently, this modification is designed to give countries enough time to create a clear and unified regulatory framework for crypto asset exposure.

Updated Timeline for Crypto Regulation

The GHOS’s decision to delay the implementation deadline after a thorough evaluation of the progress and readiness of member jurisdictions in adopting the new standards is a great decision. Given the different speeds of crypto regulatory adaptation, this measure aims to achieve a level of competition while making the markets more stable worldwide.

The Basel Committee supported this prudential standard in December 2022. It was meant to address the financial stability risks brought by crypto assets while promoting responsible innovation in the banking sector.

The Group of Governors and Heads of Supervision of the #BaselCommittee commend “good progress” on implementing #BaselIII and reiterate their expectation for full and consistent implementation as soon as possible https://t.co/ErupSvGzRF pic.twitter.com/RqOL6J2zYs

— Bank for International Settlements (@BIS_org) May 13, 2024

Tiff Macklem, the Chair of the GHOS and the Governor of the Bank of Canada stressed the significance of the longer implementation period.

“The extension will be of great help in order to make sure that the implementation of the cryptoasset standard is both complete and uniform in all the member jurisdictions,” Macklem said.

This careful attitude is a manifestation of the general policy of precaution in the period of swift technological development and changes in market conditions.

Central Bank Group’s Regulatory Efforts 

This is part of a larger strategic plan by the Basel Committee to deal with the new financial risks. The committee’s work program for 2023-24 has been mainly dealing with digitalization, climate-related financial risks, and the ongoing implementation of the Basel III framework. Through the process of landscape assessment and the adaptation of regulatory measures, the GHOS intends to eliminate the possible weaknesses of the global banking system caused by digital assets and other new risks.

Besides, the longer timeline is in line with crypto regulation measures in other parts of the world. The Australian Tax Office recently strengthened its rules on crypto exchanges to reduce tax evasion, showing a global tendency to strengthen the control of crypto activities.

The hum that followed the deferral of the deadline has been different in the financial markets. Cryptoasset values are still affected by the regulatory news, which is the result of the continuous uncertainty and the big role of the regulatory environments in market stability.

Nevertheless, this extension may serve as a sort of respite for the banks and financial institutions, giving them more time to adjust their activities to the new standards.

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The post Breaking: Central Bank Group Extends Crypto Regulation Deadline appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am