Banks Aren’t Going to ‘HODL’ Bitcoin

Bybit
Banks Aren’t Going to 'HODL' Bitcoin
Ledger

The 1% publicity restrict applies solely to Group 2 belongings. It implies that as a result of Group 2 belongings are extraordinarily dangerous, banks will not be allowed to have a lot in the best way of publicity to them. In the instance above, J.P. Morgan has Tier 1 capital of 13.7% of complete risk-weighted belongings. So for J.P. Morgan, complete Group 2 crypto asset holdings (together with bitcoin) can’t be greater than 0.137% of its complete risk-weighted belongings – and significantly much less of its complete belongings unweighted for threat. Admittedly, for a financial institution the scale of J.P. Morgan, that’s nonetheless lots of bitcoin. But it’s value remembering that the earlier model of the BIS proposals, issued in June 2021, didn’t impose a complete publicity restrict. So, removed from encouraging banks to maintain bitcoin, the revised proposals really make it tougher.

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