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Major Banks Reveal Crypto Exposures in Unprecedented Report

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The Basel Committee on Banking Supervision (BCBS) has released a groundbreaking report that provides insight into the involvement of major banks in cryptocurrencies. The report reveals that banks have reported approximately €9.4 billion in crypto assets, marking a significant development in understanding institutional engagement in the crypto sector.

Key Findings:

– 19 banks reported their crypto assets, with 10 from the Americas, 7 from Europe, and 2 from other regions.

– These 19 banks account for 17.1% of total risk-weighted assets and 20.9% of the overall leverage ratio exposure measure.

– Banks from the Americas represent around three-quarters of the reported exposures.

– The €9.4 billion in crypto holdings represent only 0.05% of total exposures among reporting banks and reduce to 0.01% when considering the entire sample of banks in the Basel III monitoring exercise.

Dominance of Major Cryptocurrencies:

– Bitcoin (BTC) accounts for 31% of the reported exposures, followed by Ether (ETH) at 22%.

– Bitcoin and Ether-related instruments make up nearly 90% of the reported exposures.

– Other notable cryptocurrencies in the banks' portfolios include Polkadot (2%), XRP (2%), Cardano (1%), Solana (1%), Litecoin (0.4%), and Stellar (0.4%).

– For example, banks hold positions in XRP worth €188 million or $205 million.

Categories of Crypto Activities:

– The report categorizes banks' crypto activities into three groups: 'Crypto holdings and lending,' 'Clearing client and market-making services,' and 'Custody/wallet/insurance and other services.'

– Custody, wallet, and insurance services account for half of the reported exposures, while clearing and market-making services make up 46%.

– The most significant subcategories in terms of exposure include providing custody and wallet services (14.4%), trading crypto on client accounts (13.4%), and facilitating client self-directed trading (11.7%).

– The distribution of activities varies across banks, with most having exposures primarily or exclusively in one activity group.

XRP Price Update:

At the time of writing, the price of XRP stands at $0.6094.