Cryptocurrencies are unevenly distributed among banks with higher hedged exposure according to a Bank for International Settlements report
According to a Bank for International Settlements (BIS) report released on February 28, about 20% of banks deal with crypto assets, and the majority of these banks are reportedly located in the Western Hemisphere.
According to the report, which is based on data from the first half of 2022, 17 Tier 1 banks reported approximately €2.9 billion of hedged exposure to crypto assets, along with €1 billion of crypto assets held; By first-class banks, we mean banks with a first-level capital of more than 3 billion euros and are internationally active, and what is concerned with first-level capital is the bank’s capital and disclosed reserves.
The 17 banks represent less than 20% of the total banks monitored, andEleven of these banks are located in the Americas, along with four in Europe and two in other parts of the world. And therefore, Crypto-asset holdings made up a small portion of banks’ holdings overall:
“In relative terms, hedged exposures constitute only 0.013% of total exposures built on the weighted average basis of banks reporting their dealings with crypto assets, while crypto assets held constitute only 0.005% of total exposures.”
The Bank for International Settlements has set new benchmarks to limit banks’ reserves of crypto assets to 2% by the beginning of 2025.
The #Basel_III monitoring report in full is here https://t.co/NjKcPTKOxr
– Hyun Song Shin (@HyunSongShin) March 1, 2023
Among the total number of banks monitored, crypto-asset dealings accounted for 0.003% of the total transactions, and crypto-assets held accounted for 0.001% of the total. Hedge exposure is up 30% over the first half of the year, while holding crypto assets is down 66%. The report notes that the latter figure was particularly affected by the withdrawal of banks from the study, while the drop in crypto-asset market values was another reason.
Related articles: BIS head claims fiat won battle with crypto, Bitcoin community disagrees
One bank was behind nearly 62% of the hedged approach taken with crypto assets, while four other banks accounted for 35% of the hedged approach taken with crypto assets.
It is worth noting that clearing and trading operations created three-quarters of the hedging approach overall, with Bitcoin (BTC) being the largest asset exposure primarily, with more than 40%, while Coinbase came in second with just under 30%. Ethereum (ETH) came in third with less than 5%.
