In the context of banking regulation, a Group 2 Limit refers to a specific restriction or cap placed on a financial institution’s holdings of certain cryptoassets, typically those deemed to carry higher risk. This classification, often from international bodies like the Basel Committee on Banking Supervision, designates cryptoassets that do not meet stringent classification criteria for minimal risk. Banks holding such assets face significant capital charges, limiting their permissible exposure. It aims to prevent excessive speculative risk within the traditional financial system.
Context
News reports on banking and crypto often highlight the Group 2 Limit as a significant barrier to institutional adoption of digital assets. Regulators are actively discussing the appropriate methodology for classifying and limiting these riskier crypto holdings for banks. A key debate involves whether proposed capital requirements are overly conservative, hindering innovation without adequately distinguishing between various digital asset types. Future developments will likely involve refined classification criteria and potentially adjusted capital treatments.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
