BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
SUBSCRIBE
BlockNews.com
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides
No Result
View All Result
BlockNews.com
No Result
View All Result
Home Crypto

Only 0.01% Of Banks Globally Are Exposed To Cryptocurrencies – Report

BlockNews Team by BlockNews Team
October 5, 2022
in Crypto, Media, Social
Reading Time: 4 mins read
A A
Cryptocurrencies
1
SHARES
11
VIEWS
Share on TwitterShare on Reddit

A new report by the Bank for International Settlements (BIS) reveals that the total exposure by global banks to cryptocurrencies is still relatively small. 

You might also like

Bitcoin Price Prediction: BTC Back Below $28K As US Banking Crisis Escalates

Crypto Flourishes in Vietnam with 16.6 million Holders

Crypto Twitter Thinks the Fed’s $297B Balance Sheet Expansion Is ‘QE’, but It’s Not

The report represents the findings of a study by the BIS’s Global banking regulation standard Basel Committee which collected digital asset data from 19 banks – 16 Group 1 banks and three Group 2 banks. Ten of these banks were from “the Americas, seven from Europe, and two from the rest of the world.” The study was based on crypto-asset data provided by the banks at the end of 2021.

The findings reveal that the 19 largest financial institutions hold about €9.4 billion ($9.23 billion) worth of crypto, which equates to 0.14% exposure. 

To put this figure into context, the Basel Committee considered these financial institutions’ size and expansion levels. It estimated the global crypto exposure to be around 0.01%, after including Group 3 banks. The report noted, “A small proportion of banks reported crypto exposures at the end-2021.”

With that in mind, the committee also observed the exponential growth rate of the crypto space and acknowledged that it was difficult to estimate the real exposure rate. The report states: 

“As the crypto asset market is fast evolving, it is difficult to ascertain whether some banks have under- or over-reported their exposures to crypto assets and the extent to which they have consistently applied the same approach to classifying any exposures. As such, while they help provide a broad indication of banks’ crypto asset activity, they should be interpreted cautiously.”

Bitcoin Dominates Cryptoassets Banks Are Exposed To

The report analyzed exposure distribution according to overall exposure by reporting banks, the types of crypto assets, and the activity of exposure. Concerning the first category, the findings show that crypto asset exposure is unevenly distributed across reporting banks, with digital assets belonging to the ten Americas banks comprising around one-third of the total €9.4 billion. In addition, two banks make up “more than half of overall crypto-asset exposures, and four more banks make up just below 40% of the remaining directions. 

Regarding token exposure distribution, the report states that Bitcoin (BTC) and Ethereum (ETH) are the main assets to which the top global banks are exposed. Amongst all 19 institutions, Bitcoin exposure is at 31%, and Ethereum’s is at 22%. The data also revealed “a multitude of instruments.” 

With Bitcoin or Ethereum as underlying assets making up the third and fourth most held assets. This type of exposure was 25% for Bitcoin-based tokens and 10% for Ethereum-based ones. Together, Bitcoin and Ethereum make up nearly 90% of reported vulnerabilities. 

When Bitcoin and Bitcoin-based tokens are calculated, exposure to Bitcoin alone stood at 56.1%. 

Other cryptocurrencies global financial institutions are exposed to include Ripple (XRP) as the third most exposed coin with 2%. In comparison, Cardano (ADA) and Solana (SOL) come fourth and fifth with 1% each. Litecoin (LTC) and Stellar (XLM) rank sixth and seventh with 0.4% each.

According to the report, banks also reported holding the USD Coin (USDC) stablecoin and other tokenized assets in smaller amounts. 

The report also found that “exposures span a variety of activities which directly or indirectly expose banks to crypto assets.” The exposure activities refer to crypto-related functions offered by the participating banks, with crypto holdings and lending, Clearing, client and market-making services, and custody/wallet/insurance services coming up as the top three functions. 

Custody/wallet/insurance and other services include all custody, wallet, and insurance services for digital assets used to facilitate client activity, such as self-directed or manager-directed trading. This turned out to be the most dominant activity making up 50.2% of exposure activities. 

Clearing, client, and market-making services refer to all trading activities on client accounts, ICOs, clearing derivatives and futures, and issuing securities with underlying digital assets. This makes up 46% of crypto-functions banks are involved in.

The category of crypto holdings and lending involves:

  • Holding and investing in crypto assets.
  • Lending to entities.
  • Issuing crypto assets backed by assets on the bank’s balance sheet.

These functions make up only 4% of financial institutions’ activities. 

Overall, the data by BSI shows that crypto adoption amongst banking institutions is still shallow. The reason could be a lack of clear regulations from governments worldwide that make it difficult for financial institutions to go all in on crypto assets. Hopefully, this will change as the IMF calls for “comprehensive, collaborative and coordinated” regulation of the crypto space. 

Tags: cryptocryptocurrencymarket research
TweetShareShare

Recommended For You

Bitcoin Price Prediction: BTC Back Below $28K As US Banking Crisis Escalates

by BlockNews Team
March 22, 2023
0
bitcoin price

Bitcoin price has been on a notable uptrend, rising 43% in a span of two weeks. The US banking crisis worsens and could claim First Republic Bank as...

Read more

Crypto Flourishes in Vietnam with 16.6 million Holders

by BlockNews Team
March 22, 2023
0
vietnam crypto

Vietnam has emerged as a key player in the international cryptocurrency market, with about 17% of its population possessing digital currencies. Bitcoin is the most popular digital currency,...

Read more

Crypto Twitter Thinks the Fed’s $297B Balance Sheet Expansion Is ‘QE’, but It’s Not

by BlockNews Team
March 22, 2023
0
crypto twitter

The most recent rise in the central bank's balance sheet, according to some analysts, is not as obviously stimulative as the one that came after COVID-19. The US...

Read more

Ripple-SEC Case: XRP Price Turns Bullish As Coinbase Hints At Relisting

by BlockNews Team
March 22, 2023
0
xrp

Coinbase could relist the XRP token if Ripple wins the ongoing lawsuit against the SEC. The exchange will initiate the relisting process immediately after the court pronounces itself...

Read more

Solana’s Top DEX Orca Restricts Access For American Users

by BlockNews Team
March 22, 2023
0
orca.so

US-based users will be banned from trading on Orca’s web interface beginning March 31st. Orca said the ban exempts those who trade directly using smart contracts and their...

Read more
Next Post
Robert Kiyosaki

Buy Bitcoin (BTC) Now - Robert Kiyosaki

Related News

LG-NFT

LG introduces NFTs to Smart TVs in the US

September 8, 2022
Bittrex

US Treasury’s OFAC and FinCEN Announce $29M in Enforcement Actions Against Bittrex

October 12, 2022
visa mastercard

Visa and Mastercard Continue Adding New Debit-Card Partnerships with Crypto Companies

March 14, 2023

Browse by Category

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized
BlockNews.com

BlockNews.com brings you the most important Crypto and NFT news in the space.

CATEGORIES

  • Breaking News
  • Business
  • Crypto
  • DeFi
  • Finance
  • Gaming
  • Guides
  • Investing
  • Media
  • Metaverse
  • NFT
  • Opinion
  • Politics
  • Social
  • Technology
  • Uncategorized

RECENT POSTS

  • Bitcoin Price Prediction: BTC Back Below $28K As US Banking Crisis Escalates March 22, 2023
  • Crypto Flourishes in Vietnam with 16.6 million Holders March 22, 2023
  • Crypto Twitter Thinks the Fed’s $297B Balance Sheet Expansion Is ‘QE’, but It’s Not March 22, 2023

© 2022 BlockNews.com - Crypto and NFT news website by JRNY Club.

No Result
View All Result
  • Home
  • Crypto
  • NFT
  • Metaverse
  • DeFi
  • Business
  • Technology
  • Opinion
  • Guides

© 2022 BlockNews.com - Crypto and NFT news website by JRNY Club.

Are you sure want to unlock this post?
Unlock left : 0
Are you sure want to cancel subscription?