RE: Consultative Document - Cryptoasset Standard Amendments (December 2023)
The American Bankers Association (ABA) is pleased to respond to the consultative document (Consultation) dated December 2023, issued by the Basel Committee on Banking Supervision (BCBS) concerning proposed amendments to its standard on banks' exposures to cryptoassets.
The proposed changes flesh out the criteria on the composition of the reserve assets that back stablecoins and put in place a due diligence requirement to ensure that banks have an adequate understanding of their stabilization mechanisms.
ABA members are closely monitoring the evolution of standards and practices across cryptoasset markets, as they assess possible opportunities to enter stablecoin markets and the possible roles they may play. ABA members' consideration extend to opportunities as stablecoin issuers, as potential providers of custodial and other services to issuers and stablecoin investors, and as intermediaries for customers seeking exposure to stablecoins. In all these potential roles, ABA strongly supports the importance of clear, rigorous standards for the maintenance and management of reserves backing stablecoins and for clear disclosure and transparency concerning the details of stabilization mechanisms and other essential features of stablecoin assets.
Accordingly, we believe that BCBS is taking a useful step in seeking to clarify the details of stabilization mechanisms and the composition of reserve assets. As described further in this letter, we believe the proposed approach deserves significant further development. Moreover, we believe that some of the details set forth in the Consultation are likely to prove impractical and should be reconsidered.
Download the comment letter to read the full text.