Definition ∞ The CRR III Framework represents the European Union’s updated prudential regulations for banks, incorporating the final Basel III reforms. This regulatory framework establishes rules for capital requirements, risk management, and supervision of credit institutions within the EU. Notably, CRR III includes specific provisions addressing banks’ exposures to crypto assets, setting out how these holdings should be treated for capital adequacy purposes. Its objective is to strengthen financial stability and harmonize regulatory approaches across member states.
Context ∞ The CRR III Framework is a critical regulatory development for European banks considering or holding digital assets, with its implementation significantly impacting their capital allocation strategies. The ongoing debate focuses on the specific risk weights assigned to different crypto asset categories, influencing institutional adoption. Financial institutions are actively preparing for these new requirements to ensure compliance and manage their digital asset portfolios effectively.
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