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The deadline for regulating cryptocurrencies has been extended by the central bank group
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 crypto exposures. banking activities. The earliest expected end date is January 2025, but the deadline has been pushed back to January 1, 2026.
As a result, this change is designed to give countries enough time to create a clear and unified agreement regulatory framework for the exposure of crypto assets.
Updated timeline for cryptocurrency regulation
GHOS’s decision to delay the implementation deadline after a thorough evaluation of member jurisdictions’ progress and preparedness in adopting the new standards is an excellent decision. Given the different speeds of adaptation of crypto regulation, this measure aims to achieve a level of competition by making markets more stable worldwide.
The Basel Committee supported this prudential standard in December 2022. It had to address the resulting risks to financial stability cryptographic resources while promoting responsible innovation in the banking sector.
Tiff Macklem, president of the GHOS and governor of the Bank of Canada, highlighted the importance of a longer implementation period.
“The extension will greatly assist in ensuring that the implementation of the cryptoasset standard is complete and uniform across all member jurisdictions,” Macklem said.
This cautious attitude is a manifestation of the general policy of precaution in the period of rapid technological development and changes in market conditions.
The Regulatory Efforts of the Central Bank Group
This is part of a larger strategic plan by the Basel Committee to deal with new financial risks. The Committee’s work program for 2023-24 mainly addressed digitalisation, climate-related financial risks and the ongoing implementation of the Basel III framework. Through the process of assessing the landscape and adjusting regulatory measures, the GHOS aims to eliminate possible weaknesses in the global banking system caused by digital assets and other new risks.
Furthermore, the longer period is in line with cryptocurrency regulatory measures in other parts of the world. THE Australian Taxation Office has recently tightened its rules on cryptocurrency exchanges to reduce tax evasion, showing a global trend of tightening control of crypto assets.
The buzz that followed the postponement of the deadline was different on the financial markets. Cryptocurrency values are still influenced by regulatory changes, which are the result of continued uncertainty and the large role of regulatory environments in market stability.
However, this extension could represent a sort of respite for banks and financial institutions, giving them more time to adapt their activities to the new standards.
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