Citi: "Virtual asset risk weight 1250%... Bank regulations need to be eased"

Although the distinction between virtual assets (cryptocurrencies) and traditional finance (TradFi) has recently become clearer, global banking regulations are still imposing high risk weights on virtual assets. As a result, it has been argued that financial institutions are having difficulties actively participating in the digital asset market.

According to Bloomberg on the 27th (local time), Tina Lee, head of Citigroup's UK branch, said at a conference, "Under the global regulations coming into effect next year, banks will receive a 1250% risk weight on all virtual assets held on their balance sheets," and pointed out that "this is an excessive measure from the banks' perspective."

Tina Lee further stated, "If such regulation continues, banks will face significant burdens in holding virtual assets," and expressed concern, saying, "Measures should be taken to prevent virtual assets from moving into the shadow banking sector."