August 6, 2025
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European Banking Authority Releases Updated Risk Framework For Cryptoassets

Aug 6, 2025

The European Union (EU) has taken another stride towards a completely regulated cryptocurrency environment. The European Banking Authority (EBA), which serves as the primary banking regulator for the EU, has unveiled a significant draft framework delineating how banks should address their exposure to cryptoassets.

Alongside this, the EBA has introduced more stringent capital requirements for banks that hold digital assets. However, the EBA’s new draft, which is part of the Capital Requirements Regulation (CRR), offers a regulatory endorsement for banks that have been reluctant to venture into the crypto market due to ambiguity.

On 5 August 2025, the EBA published its final draft of Regulatory Technical Standards (RTS) that outlines the technical components required for institutions to assess and summarize their cryptoasset exposures with respect to the prudent treatment of such exposures.

“The RTS tackle implementation details and will facilitate the standardization of capital requirements pertaining to crypto-asset exposures by institutions throughout the EU,” stated the EBA.

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New Guidelines Aim to Establish Uniform Regulations Across All Financial Institutions

“Institutions display an increasing enthusiasm for participating in crypto-assets activities,” the EBA remarked.

As per the EBA, this enthusiasm stems from the prospect of new revenue avenues and the necessity to maintain competitiveness.

“Institutions are contemplating various roles, such as acting as custodians for crypto-assets, issuing crypto-assets, and offering associated services like trading and lending on behalf of their clientele,” the EBA added.

Now, banks will be mandated to adopt specific and comprehensive risk models for their crypto holdings. The EBA’s draft calls for robust models to address credit risk, crypto market risk, and counterparty credit risk, among others.

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ESMA Proposes Framework for Evaluating Employee Competence in Crypto Enterprises

The European Securities and Markets Authority (ESMA) introduced new guidelines aimed at evaluating competence criteria for employees engaged in crypto-related sectors. Moreover, the new guidelines align with the EU’s Markets in Crypto-Assets Regulations (MiCA).

In February, the European watchdog published a consultation document. According to that document, the primary aim of the draft guidelines is to guarantee a baseline level of knowledge and competence among staff providing guidance and information on crypto-assets or crypto-asset services to clients.

This initiative will significantly “enhance investor safety and build investor confidence in the crypto-asset markets.”

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Essential Insights

  •  In aligning with the EU’s MiCA compliance and global standards, this initiative heralds a new phase of development for the digital asset sector. Additionally, it facilitates safer participation of traditional banks in the crypto marketplace. 

  • The EBA serves as the fundamental banking regulator for the entire European Union. Notably, its mandate is to uphold the stability of the European financial framework.

 

The article European Banking Authority Unveils New Risk Guidelines For Cryptoassets first appeared on 99Bitcoins.

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