Trade groups representing banks, asset managers, and the blockchain industry have collectively urged the Basel Committee on Banking Supervision to steer clear of overly cumbersome regulations that risk stifling innovation in the crypto industry.
According to the Financial Times, a letter sent by the trade groups said proposals to regulate the crypto space were “so overly conservative and simplistic that they, in effect, would preclude bank involvement in crypto asset markets.”
The letter was signed by a multitude of groups, including the Global Financial Markets Association, the Institute of International Finance, the International Swaps and Derivatives Association, the Financial Services Forum, and the Chamber of Digital Commerce.
The Basel Committee is responsible for setting the standard for the world’s approach to banking regulation. Earlier this year, Basel said that banks will have to cover their Bitcoin holdings with their own capital—in other words, setting aside
