With the aim of clarifying new banking capital regulations, the European Union has taken a conservative approach to cryptoassets, reinforcing its goal of keeping under-supported crypto-assets outside the banking system.

The decision was announced by the Economic and Monetary Affairs Committee of the European Parliament and was taken by the European Parliament, member states and the European Commission. The European Commission proposed new regulations in 2021.
These decisions, which will be submitted to the approval of the member states in the European Council, will bring important changes in the risk assessment methods of banks regarding corporate and housing loans. It is stated that this process can take months.
Swedish Finance Minister Elisabeth Svantesson, chairing the meeting attended by EU member states, said: "These new rules, which allow for the risk weight readjustment of certain banking assets, such as corporate loans, will increase the strength and resilience of banks operating in the EU."
The council's statement states that there is a "prudential transitional regime" for cryptoassets and no further details were given.
International standard-setting bodies such as the Basel Committee are currently working on creating a global crypto regulatory framework. But the details that have emerged so far suggest that their approach may be harsh. For example, limitations such as a maximum risk weight of 1250 percent for free cryptocurrencies come to the fore.
In this case, banks will have to allocate one Euro for each bitcoin or ether they hold, which may reduce their risk appetite. EU parliamentarians state that these practices will become clear in the near future.
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