A globally consistent crypto regulatory framework is urgently needed to allow banks to handle crypto assets on behalf of large clients, a JPMorgan executive has said. “We need a globally consistent regulatory framework. It is important that we reach a solution as quickly as possible.”
A global regulatory framework is urgently needed to allow banks to offer crypto exposure to customers, says JPMorgan
Debbie Toennies, managing director and head of regulatory affairs at global investment bank JPMorgan Chase & Co., spoke about global crypto regulation applicable to banks on Tuesday at an event hosted by the International Swaps and Derivatives Association.
The JPMorgan executive said new rules are urgently needed to provide banks with certainty in handling crypto assets on behalf of large clients seeking exposure to the asset class.
A growing number of large institutions, including hedge funds, are interested in investing and gaining exposure to the class of crypto assets. According to Wells Fargo, cryptocurrency has entered the “hyper adoption phase.”
Noting that some very large players had asked JPMorgan to hedge their crypto asset exposures, Toennies opined:
I think we need a consistent regulatory framework globally. It is important that we reach a solution as soon as possible.
Global banking regulators at the Basel Committee on Banking Supervision are discussing rules for banks to handle crypto assets. In June last year, the Committee proposed divide crypto assets into two groups and regulate them based on their market, liquidity, credit and operational risks for banks. However, final rules aren’t expected until at least next year.
Toennies revealed that the global investment bank has been talking to different jurisdictions about “provisional treatment” for crypto assets while waiting for the Basel Committee to set applicable rules.
The head of Regulatory Affairs at JPMorgan detailed:
The real risk for all of our economies is that if we don’t find a solution that allows banks to engage with our customers in a protected way, this activity will fall outside the regulatory perimeter and I am concerned about financial stability.
Do you agree with JPMorgan that banks urgently need clear rules on crypto? Let us know in the comments section.
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