Europe: Banks don’t need extra cryptographic protection

The European Banking Authority (EBA) said in its response to the European Commission’s call for advice that banks do not need protections against cryptocurrencies – yet, according to a Friday press release April 29 of the European decision-maker.

The European Commission’s call for advice offered a series of recommendations aimed at “simplifying procedures around some of the existing macroprudential tools and increasing harmonization for others,” the press release said.

The EBA wants to see the region rebuild buffers of regulatory capital so that they can be released when needed; undertake an assessment of the interaction of macroprudential measures with leverage ratio, capital and eligible liabilities (MREL) requirements; maintain clear roles and responsibilities for the various authorities involved; and include a legal mandate in the Capital Requirements Directive (CRD) to develop methodologies covering both the identification of other significant institutions.

The authority is also seeking to simplify the text of the CRD and the capital requirements regulation (CRR) around the governance procedures of certain macroprudential measures; perform further assessments on the ability of current macroprudential tools to address environmental risks, crypto assets and cybersecurity; and put in place a surveillance and monitoring system for non-bank lenders and expand the scope of the macroprudential framework to cover non-bank lenders.

Related: EU Policymakers Question ‘Resource-Intensive’ Crypto Oversight Proposals

Earlier this week, PYMNTS reported on new proposals from the European Union to monitor crypto transactions with non-hosted wallets, which could breach the risk-based approach advocated by money laundering regulators.

CoinDesk reported that policymakers said any decision to remove a $1,055 threshold to identify crypto payments should be backed by evidence.

The European Parliament voted on March 31 to identify participants in crypto payments, including transactions with wallets not hosted on a regulated exchange. This has led to warnings from industry about how it could derail innovation and harm privacy, according to the report.

The new rules would also require forcing large transactions with non-hosted wallets to be automatically reported to authorities – which critics say could be overwhelming. Speaking at an event on Wednesday at the European Parliament in Brussels, Joana Neto of the European Banking Authority said it was “resource intensive” and wondered who was going to run it all.

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