Weekly Global News Wrap: Bank watchdog to consult crypto rules; Stablecoins must be regulated like payments, says BoE
And UBS' new digital wealth management platform pulls $3.7b in first year.
The Basel Committee on Banking Supervision will consult on how lenders should shield themselves from crypto assets, as regulators turn up the heat on a growing but risky investment sector.
"The committee agreed to publish a consultation paper to seek the views of external stakeholders on the design of prudential treatment of banks' exposures to cryptoassets," the watchdog said in a statement. The paper will be published in the week of 7 June.
Prudential rules force banks to assign "risk weightings" to each type of asset such as loans or derivatives, which are then added up to determine how much capital should be held.
Stablecoins, a form of cryptocurrency that are usually pegged to a traditional currency, must be regulated in the same manner as payments if they become widely used, according to the Bank of England.
The central bank also said it had made no decision yet about whether to issue its own central bank digital currency (CBDC), a prospect dubbed 'Britcoin' by UK finance minister Rishi Sunak.
"Stablecoins used as money should meet equivalent standards as those provided by commercial bank money, otherwise known as bank deposits," the BoE said. Stablecoin issuers would need to meet capital and liquidity rules, and offer deposit insurance.
UBS’s new hybrid digital wealth management platform has attracted $3.7b in its first year, boosting CEO Ralph Hamers’ plan of winning more business from the lower echelons of the global rich.
The investment bank is making moves to improve its digital services to reach customers outside its super rich core client base, with a new online platform called MyWay open to people with $278,000 (CHF250,000) upwards.
The project, which began in May 2020, has the potential to pull in $30within the next 12 months, a source said. A UBS spokesman confirmed that target and current assets of $3.7b.