Definition ∞ Basel Standards Alignment refers to the process of ensuring financial institutions comply with international banking regulations when holding or dealing with digital assets. These standards, issued by the Basel Committee on Banking Supervision, establish capital requirements and risk management guidelines for banks. For cryptocurrencies, alignment means determining appropriate risk weights and capital charges for various digital asset exposures. This process aims to integrate digital assets into the existing regulatory framework for financial stability.
Context ∞ Discussions around Basel Standards Alignment are highly active, with regulators seeking to establish clear rules for banks’ crypto holdings to prevent systemic risk. The current debate centers on appropriate risk weightings for different types of crypto assets, particularly stablecoins and unbacked cryptocurrencies. Future developments will likely involve specific guidance on how banks must account for and capitalize their digital asset activities.
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