Caixin: Singapore plans to optimize bank crypto asset capital regulation

BlockBeats News, April 22 — According to Caixin, the Monetary Authority of Singapore (MAS) has issued a consultation paper, proposing that before implementing the Basel crypto asset capital framework, it will set more favorable regulatory capital guidance for crypto assets on permissionless blockchains (public chains).

The current Basel rules are considered to be strict in the classification of public-chain assets, which may suppress innovation in the banking industry. The Basel crypto asset capital framework divides crypto assets into two groups: the first group involves tokenized traditional assets and stablecoins, and is subject to lower capital requirements; the second group involves crypto assets that do not meet the above conditions. MAS plans to abandon the approach of uniformly classifying crypto assets on permissionless blockchains as Group 2 crypto assets, and instead allow—under a set of principled requirements—those assets to be categorized as Group 1 crypto assets, which carry lower risk weights and more relaxed prudential requirements, achieving regulatory technology neutrality.

The specific provisions are: for banks incorporated and registered in Singapore, the risk exposure of crypto assets on permissionless blockchains classified as Group 1 must not exceed 2% of the bank’s Tier 1 capital, and if the issuance creates liabilities at the bank level, the issuance size must not exceed 5% of Tier 1 capital.