Given crypto-assets’ high degree of price volatility and lack of standardization, the BCBS said, banks holding such assets need to adopt governance and risk management practices around them as well as publicly disclose any direct or indirect exposures.
The statement from the Basel Committee said crypto-assets, also called cryptocurrencies, pose a litany of risks, including liquidity risk; credit risk; market risk; operational risk (including fraud and cyber risks); money laundering and terrorist financing risks; and legal and reputation risks.
Currently, banks have very limited direct exposures to crypto-assets, the BCBS noted. Before a bank dips its toe in, the BCBS said, it needs to conduct a comprehensive analysis of all the above risks and ensure it has the technical expertise to adequately gauge them.
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