Global Regulation Urgently Needed for Banks to Help Clients Invest in Crypto – According to a JPMorgan executive, a globally consistent crypto regulatory framework is urgently needed to enable banks to handle crypto assets on behalf of large customers.
“We require a global regulatory system that is uniform.” It’s critical that we find a solution as soon as possible.”
At an event held by the International Swaps and Derivatives Association on Tuesday, Debbie Toennies, managing director and head of Regulatory Affairs at global investment bank JPMorgan Chase & Co., discussed global cryptocurrency regulation that applies to banks.
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New laws are urgently needed, according to the JPMorgan executive, to give banks confidence in handling crypto assets on behalf of large customers seeking exposure to this asset class.
A rising number of significant institutions, including hedge funds, are ready to invest in the crypto asset class and acquiring exposure to it. According to Wells Fargo, cryptocurrency has entered the “hyper adoption era.”
Toennies commented, “Some very major players have requested JPMorgan to hedge their exposures to crypto assets,” noting that “some very large players have asked JPMorgan to hedge their exposures to crypto assets.”
At the Basel Committee on Banking Supervision, global banking regulators are debating how banks should deal with crypto assets. The Committee advocated splitting cryptocurrency assets into two classes and regulating them based on credit, liquidity, market, and operational risks to banks in June of last year. Final rules, on the other hand, are not expected until at least next year.
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Global Regulation Urgently Needed for Banks to Help Clients Invest in Crypto – Toennies disclosed that the global investment bank has been discussing “interim treatment” for crypto assets with various jurisdictions while waiting for the Basel Committee to draft suitable guidelines.
According to JPMorgan’s head of regulatory affairs:
The real risk to all of our economies is that unless we find a solution that allows banks to engage with their clients in a hedged manner, this activity will move outside of the regulatory perimeter, and I am concerned about financial stability.