Definition ∞ Group 2b Assets are unbacked crypto assets that fail to meet specific classification criteria for more favorable regulatory capital treatment. Within the Basel framework for banks’ crypto exposures, these assets are characterized by their high volatility and lack of direct backing by traditional financial assets. They are subject to the most stringent capital requirements, often necessitating a 1250% risk weight. This classification aims to mitigate the significant risks these assets pose to financial institutions’ balance sheets.
Context ∞ The classification of certain digital assets as Group 2b Assets by global banking regulators creates substantial capital hurdles for banks seeking to hold them. This designation is a major point of contention within the crypto industry, which argues for more nuanced risk assessments. The debate influences institutional adoption rates and shapes the regulatory landscape for unbacked cryptocurrencies.
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