Caixin: Singapore Plans to Enhance Bank Capital Rules for Crypto Assets

BlockBeats News, April 22nd. According to Caixin, the Monetary Authority of Singapore (MAS) has issued a consultation paper proposing to establish a more crypto-friendly regulatory capital framework for crypto assets on permissionless blockchains (i.e., public blockchains) before implementing the Basel framework for crypto asset capital requirements.

The current Basel framework is considered to be stringent in classifying public blockchain assets, which may hinder innovation in the banking industry. The Basel framework for crypto asset capital requirements categorizes crypto assets into two groups: the first group involves tokenized traditional assets and stablecoins, which are subject to lower capital requirements; the second group involves crypto assets that do not meet the criteria for the first group. The MAS plans to avoid a one-size-fits-all classification of permissionless blockchain crypto assets as Group 2 crypto assets. Instead, it will allow these assets to be classified as Group 1 crypto assets with lower risk weights and more lenient prudential requirements, provided they meet a set of foundational principles, thus achieving regulatory technology neutrality.

The specific provisions are as follows: for Singapore-incorporated banks classified as Group 1 crypto assets on permissionless blockchains, the risk exposure to these assets must not exceed 2% of the bank's Tier 1 capital. If the issued assets form liabilities at the bank level, the scale of issuance must not exceed 5% of the Tier 1 capital.