Banks Worldwide Have Over $9,200,000,000 in Crypto Asset Exposure: New Study

by Arthur · October 3, 2022

Banks Worldwide Have Over ,200,000,000 in Crypto Asset Exposure: New Study

New research published by an international committee formed to develop banking regulatory standards provides some insight into the exposure of banks to crypto-assets.

The Basel Committee on Banking Supervision sought to analyze banks’ exposure to crypto as part of its analytical, supervisory and policy initiatives related to the nascent asset class.

Using data submitted by 19 banks, 10 of which are from America, seven from Europe and two from elsewhere, the research found that the average exposure of crypto assets to banks is around $9.24 billion.

The report notes that exposure is unevenly distributed, with only two banks accounting for over half of crypto exposure and four accounting for less than 40%.

The data also showed which digital assets the banks have the most exposure to. Bitcoin (BTC) tops the list, followed by Ethereum (ETH).

“Reported exposures to cryptoassets mainly consist of Bitcoin (31%), Ether (22%) and a variety of instruments with either Bitcoin or Ether as the underlying cryptoassets (25% and 10% respectively). Together these account for almost 90% of reported exposures.”

The study shows that the banks also have significant exposure to Polkadot (DOT), Ripple (XRP), Cardano (ADA), Solana (SOL), Litecoin (LTC) and Stellar (XLM) as well as less exposure to the stablecoin USD Coin (USDC) and others tokenized assets.

Banks’ exposure to crypto spans three broad categories, namely crypto holdings and lending, clearing and market-making services, and custody/wallet/insurance services.

“Custody/wallet/insurance and other services make up half of the reported crypto exposures, with the remainder largely made up of clearing and market making services (46%) and the remaining 4% due to crypto holdings and lending.”