Definition ∞ Group 2 Assets typically refers to a classification of digital assets that present a higher risk profile compared to Group 1 assets, often due to factors like market volatility, lack of established regulation, or algorithmic dependencies. This category generally includes unbacked cryptocurrencies such as Bitcoin and Ether, as well as certain stablecoins with less stringent reserve backing. Financial institutions holding these assets may face higher capital requirements. They represent a more speculative class of digital holdings.
Context ∞ Crypto news often discusses the regulatory implications of classifying digital assets as “Group 2,” particularly concerning capital charges for banks and other financial institutions. The proposed Basel framework suggests a conservative approach, requiring significant capital reserves for these assets, which could influence institutional engagement with the broader crypto market. This classification highlights ongoing debates about risk assessment and the appropriate regulatory treatment for various digital asset types.
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