Definition ∞ Group Two Assets, within the context of banking regulation, refers to a classification of digital assets that are not considered to be traditional assets or stablecoins. These assets typically exhibit higher volatility and pose greater risks to banks. Regulatory frameworks, such as those proposed by the Basel Committee, assign higher capital requirements to these assets to mitigate potential financial instability. This categorization influences how banks can hold cryptocurrencies.
Context ∞ The classification of digital assets into “Group Two” is a central point of discussion among international banking regulators. Banks are evaluating the implications of these proposed capital charges on their ability to hold or offer services related to non-stablecoin cryptocurrencies. Future regulatory updates will refine the definitions and capital treatments for various digital assets, directly impacting institutional participation in the crypto market.
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