Singapore Banks To Hold $125 for Every $100 of Bitcoin Exposure

Singapore’s senior minister, Tharman Shanmugaratnam, stated on November 28 that banks in the country must hold $125 in capital for every $100 in risky crypto assets such as Bitcoin (BTC) and Ethereum (ETH).

Shanmugaratnam stated in a written response to Singapore’s parliament that Singapore-based banks have “insignificant” exposure to cryptocurrency. The minister of the Monetary Authority of Singapore (MAS) added that the exposure was “less than 0.05% of their total risk-weighted assets.”

Shanmugaratnam revealed that Singapore was an active participant in the Basel Committee on Banking Supervision (BCBS) framework for banks’ exposure to cryptocurrency. He stated that the committee’s final framework is expected to be released by the end of the year.

However, Shanmugaratnam stated that the financial regulator has ensured that banks in the country have applied the highest risk weight under the BCBS’ capital framework, which is a 1250% risk weight for exposures to riskier crypto assets such as Bitcoin and Ether, pending the release of that framework.

According to the minister:

“For less risky crypto assets, such as tokenised corporate bonds that meet a set of conditions to ensure that they pose the same level of financial risks as traditional corporate bonds, the prudential treatment is similar to that applied to the traditional non-tokenised asset.”

Singapore’s financial authorities have issued a number of statements to dispel myths about FTX’s exposure to Singaporeans. The MAS stated that the bankrupt cryptocurrency exchange was not licensed to operate in the country and explained why it was not added to its Investor Alert List (IAL).

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