Tuesday, December 6, 2022
HomeAltcoinsFinancial institution around globe holds over $9.38 billion in crypto asset: Study

Financial institution around globe holds over $9.38 billion in crypto asset: Study

In a recent survey on banking supervision, the Basel Committee discovered that 19 of the world’s top banks, out of 182, confirmed holding the digital asset. As per the committee, the total exposure of cryptocurrency holdings is estimated to be around $9.38 billion ($9.4 billion), or €9.4 billion. Notably, the Basel Committee is the official organization in charge of setting rules for bank capital, liquidity, and funding.

The crypto holding of 19 banks is $9.38 billion in a large scheme of things implying only 0.14% of 19 bank’s cryptocurrency overall threat assets composition. Moreover, the risk-weighted assets of the 182 banks regulated by the Basel Committee only make up roughly 0.01% of the total. More than half of all crypto-asset holdings were held by two banks, while the remaining 40% was held by four other institutions.

As per the committee findings the three main cryptocurrencies were Bitcoin (BTC) (31%), Ether (ETH) (22%) and swaps on Bitcoin or Ether (35%). XRP (2%), Cardano (ADA) (1%), Solana (SOL) (1%), Litecoin (LTC) (0.4%), and Stellar (XLM) (0.4%) were also listed. Banks kept 50.2% of digital assets for performance in custody, wallets, or insurance. An additional 45.7% were reserved for market-making and clearing. Furthermore, it is expected that 4.2% of the crypto in this category was borrowed and lent.

Basel Committee thoughts over finding

The Basel Committee urges the results of this study to be “interpreted with a degree of care” due to the difficulties in determining whether some banks have under-or over-reported their exposure to crypto assets. According to prior Basel Committee recommendations, banks should keep their exposure to volatile cryptocurrencies to a minimum.

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