Catenaa, Tuesday, August 12 2025-The European Banking Authority has finalized draft rules requiring EU-based banks to hold far higher capital reserves against holdings of unbacked cryptocurrencies such as Bitcoin and Ether.
The framework, released Tuesday, seeks to harmonize capital requirements across the bloc and applies to institutions with crypto assets on their balance sheets.
Under the plan, banks must assign a 1,250% risk weight to so-called Group 2b assets, including Bitcoin and other unbacked tokens, meaning a €1 million position would require €12.5 million in capital.
Group 2a assets, which meet certain hedging criteria, face the same weighting, while asset-referenced tokens in Group 1b carry a 250% risk weight.
The technical standards, part of the Capital Requirements Regulation III adopted in July 2024, add detailed modeling for credit, market and counterparty risks. They also mandate strict separation between crypto assets, preventing offsetting positions, for example, between Bitcoin and Ether.
The European Commission now has three months to endorse, amend or return the draft. If approved, the rules will pass to the European Parliament and Council for up to six months of review before taking effect.
The EBA’s stance diverges from moves in the U.S. and Switzerland, where regulators are easing pathways for banks to engage in crypto activities. Critics warn the EU’s approach could dampen bank participation in the expanding digital asset market.
Italian bank Intesa Sanpaolo, which purchased €1 million in Bitcoin in January, would face steep new capital requirements under the rules. Fintech Revolut is unlikely to be affected as its crypto operations are off-balance sheet.
