Bitcoin News Today: EU Banks Face 1250% Capital Charges on Unbacked Cryptocurrencies

Generated by AI AgentCoin World
Thursday, Aug 7, 2025 2:48 pm ET2min read
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Aime RobotAime Summary

- The EU’s EBA finalized 1,250% capital requirements for unbacked crypto assets like Bitcoin, forcing banks to hold €12.5M capital per €1M exposure.

- The CRR III framework aims to harmonize crypto regulations across the EU, with stricter rules for Group 2b assets and moderate 250% weights for asset-linked tokens.

- Banks like Intesa Sanpaolo face financial disincentives to hold crypto under the rules, contrasting with more lenient approaches in the U.S. and Switzerland.

- Analysts call the 1,250% risk weight one of the world’s strictest, likely reducing crypto liquidity and challenging smaller institutions’ solvency.

The European Banking Authority (EBA) has finalized a comprehensive set of rules that will impose significantly higher capital requirements on EU-based banks holding unbacked cryptocurrencies such as

Bitcoin
and Ether [1]. The new regulatory framework, part of the Capital Requirements Regulation III (CRR III) which became effective in July 2024, mandates a 1,250% risk weight for crypto assets classified under Group 2b [2]. This translates to banks needing to hold €12.5 million in capital for every €1 million of exposure, effectively discouraging traditional
financial institutions
from engaging with unbacked digital assets [2].

The rules aim to harmonize crypto-related capital requirements across the EU and close technical implementation gaps. Under the framework, Group 2a assets—unbacked tokens meeting specific hedging and netting criteria—face similar capital charges, while Group 1b assets, such as asset-referenced tokens tied to fiat or financial instruments, are assigned a more moderate 250% risk weight [2]. The EBA has also detailed methodologies for assessing crypto-related credit, market, and counterparty risks, with strict mandates for asset separation, meaning banks cannot offset Bitcoin and Ether exposures against each other.

The European Commission has up to three months to endorse or revise the draft, after which the framework will proceed to the European Parliament and Council for further review [2]. If approved without objections, the rules will become law 20 days after publication in the EU’s Official Journal.

The implications of the rules are already evident for institutions like Intesa Sanpaolo, which recently disclosed a €1 million Bitcoin purchase. Under the new regime, the bank would be required to hold €12.5 million in capital to cover that position, making it financially unattractive to maintain such holdings [2]. While some fintech firms, such as Revolut, may avoid the full impact by handling crypto operations through non-banking subsidiaries, the overall effect on the sector remains significant.

This move contrasts with the more lenient approach seen in the United States, where the FDIC has eased restrictions on crypto activities, and in Switzerland, where new legislation allows banks to custody tokenized securities and support stablecoin operations [2]. However, the EU’s stringent capital charges reflect a broader regulatory effort to manage the inherent volatility and uncertainty of unbacked digital assets.

Analysts suggest the 1,250% risk weight is among the most rigorous globally, signaling a conservative regulatory stance that prioritizes stability over innovation in the crypto space [2]. The increased costs of compliance could lead to reduced liquidity for unbacked crypto assets and may indirectly affect trading volumes and price stability. While larger institutions with diversified portfolios may absorb the capital burden more easily, smaller banks or crypto-focused entities could struggle to remain solvent under the new framework.

The timing of the announcement, in late July and early August 2025, aligns with a period of global regulatory scrutiny of digital assets. The EU’s prescriptive approach stands in contrast to the ongoing U.S. debate over macroeconomic factors like the Consumer Price Index and their influence on crypto markets [2]. This divergence may drive banks to shift operations to more crypto-friendly jurisdictions, further fragmenting the global financial landscape.

As the EU moves forward with finalizing the rules, it remains to be seen whether adjustments will be made in response to stakeholder feedback or market concerns. For now, the message is clear: under the new regime, engaging with unbacked crypto assets as a bank is associated with higher risk and significantly greater capital costs.

Sources:

[1] FinanceFeeds, https://financefeeds.com/eu-banks-face-hefty-capital-charges-under-new-crypto-rules/

[2] CoinMarketCap, https://coinmarketcap.com/community/articles/6894f1c8d451fb53687c520f/