Lawmakers in the European Union have backed legislation imposing new capital requirements for financial institutions, including strict rules meant to cover crypto-related risks. The latter concern banks keeping digital assets and are expected to enter into force in January, 2025.Members of the European Parliament’s Committee on Economic and Monetary Affairs supported a bill on Tuesday designed to enforce the latest global bank capital rules.
Other jurisdictions, including the U.S. and U.K., are also moving in a similar direction. However, ECON is introducing additional regulations with the European draft law, obliging banking institutions to hold enough capital to fully cover crypto asset holdings. Such prohibitive capital requirements will help prevent instability in the crypto world from spilling over into the financial system.The changes, which are in line with the recommendations of global banking regulators, represent an interim measure pending further legislation. An earlier version of the bill was already approved by the member states and the European Parliament will have to negotiate the final draft with them.
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The central bankers are scared to death of bitcoin, because they can't manipulate it like they do fiat currency.
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The share of people opting to be their own bank (via a 12 or 24 word phrase) is increasing. Liquidity is slowly sucked out of the traditional banking system and absorbed by Bitcoin.
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This development is a huge step for banking in Europe. It could pave the way for crypto adoption too, as regulations get clearer. HODL!
EU making huge step into the future