EU Strengthens Cryptocurrency Regulation... Imposes Risk Weights on Banks Holding Bitcoin

The European Union (EU) will impose a 1,250% risk weight on banks holding unsecured cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH).

According to Cointelegraph on the 7th (local time), the European Banking Authority (EBA) announced the final regulation, containing this content, on the 5th. The European Commission must decide whether to approve this proposal within three months. Cointelegraph reported, "If neither the European Parliament nor the Council of the European Union objects, the regulation will take effect within 20 days from its publication in the Official Journal of the EU."

Once enforced, European banks already holding cryptocurrencies will be directly affected. For example, Italy’s Intesa Sanpaolo, which bought Bitcoin worth 1 million euros in January, will be required to secure 12.5 million euros in capital for those bitcoins under the new regulation. Cointelegraph also stated, "The EBA’s measure contrasts with the overall trend of global regulatory bodies moving towards acceptance of cryptocurrencies."