Exaggerated reserves – When it comes to wearing sticks to the wheels cryptocurrency industry innovations, European Union lawmakers always answerespecially with the regulation Not. The last example concerns a obligation total capital guarantee reserves disproportionate for banks that would dare to own Bitcoin or other crypto-assets.
Fractional reserves in euros yes, but no for Bitcoin (and also the opposite)
When we dare not frontally forbidwould try to kill regulatory choke ? This is really what we can ask ourselves when we see the latest thoughts of some European Parliament lawmakers, regarding the oversight of cryptocurrencies in the banking sector.
This is a press release published on January 24, 2023 by Committee on Economic and Monetary Affairs (ECON), which once again worries the European cryptosphere. This same commission, some of whose members had he narrowly failed to ban mining Bitcoin (and all Proof of Work/PoW based cryptocurrencies).
Never run out of ideas for slow adoption decentralized cryptocurrencies, this time the majority of ECON members voted in favor of new restrictions for banks that hold (or want to hold) digital assets. If the text that the commission has pre-adopted were also to be adopted by the plenary session of the European Parliament, these banks would have to hedge their crypto assets with a surreal capital buffer of up to 1.250% counterpart. A sacred weighing of risks!
>> Are you looking for something better than a bank to store your cryptocurrencies? Ledger has the solution (commercial link) <
1 million euros of cryptocurrencies = 12.5 million euros of coverage: seriously?
If European banks can afford it fractional reserves in eurosi.e. not having enough euros if customers suddenly asked for them all at once, for bitcoins and cryptocurrencies, that is the exact opposite.
Complies perfectly with “proposals” of the Basel Committee of December 2022, the members of the European Parliament then added a amendment requiring banks that any value held in cryptocurrencies should potentially be hedged up to 12.5 times from other assets.
According to the ECON statement, EU lawmakers also want banks to do this “disclosing their crypto-asset exposure”. So many restrictions that will surely encourage European bankers to take an interest in Bitcoin and cryptocurrencies (sorry for the sarcasm).
The Committee on Economic and Monetary Affairs is expected to present a legislative proposal “by June 2023” Like this “prudential treatment” reserved for crypto-assets. At this rate of restrictive regulations, there might not be any more more cryptographic sector to be framed in Europe, so this jurisdiction will become non-competitive with respect to others less strongly restrictive (also decidedly cryptographic).
To keep your bitcoins safe, your best bet is still a personal hardware wallet. To the ledger, there is something for all profiles and all cryptocurrencies. Don’t wait to secure your capital (trade link)!