The EU puts a cap on banks’ crypto holdings

EU banks exposed to cryptocurrencies could see caps and large capital requirements from a new financial services law as lawmakers seek to limit risks from the digital coins, a European Parliament document said.

The plan was reportedly put forward by Green Party lawmaker Ville Niinistö and wants to get ahead of capital norms being consulted by the Basel Committee on Banking Supervision.

The document noted that bitcoin or other crypto assets are considered “unduly volatile” and would be flagged as needing much more caution, meaning they would not be able to lend based on their virtual asset holdings.

Meanwhile, Stronghold Digital Mining has reached an agreement with lender New York Digital Investment Group (NYDIG) and WhiteHawk Capital to cut roughly half of its debt, a Bloomberg report said.

The agreement will also add liquidity, and the company plans to restructure a convertible note.

Stronghold will return around 26,200 bitcoin miners to NYDIG. That would eliminate all of the $67.4 million in outstanding debt from an original deal.

Bitcoin miners have struggled to raise capital and repay loans due to the fall in crypto prices since November’s all-time highs.

Ultimately, a JPMorgan analyst believes Coinbase will benefit from the merger, with customers getting value from staking ether, Coindesk wrote.

The merger refers to the upcoming transition from the proof-of-work to the proof-of-stake model for Ethereum, which is claimed to help with the carbon footprint of the network.

The analyst, Kenneth Worthington, said that Coinbase has around 15% stake in Ethereum assets, more than 7% share of the total crypto ecosystem.

JPMorgan also estimated that Coinbase could generate an incremental annual staking income of $650 million from the merger – with ETH at $2,000 and a 5% yield.

This also came when the exchange recently started offering ethereum stakes for institutional clients.

Worthington said the market share for Coinbase is likely skewed in favor of institutions, which are more likely to own ethereum and bitcoin. Retail customers, on the other hand, are likely to gravitate towards speculative tokens.