The Basel Committee reported that the total value of crypto-assets held by banks worldwide is $9.4 billion.
Banks worldwide invest ~$9.38 billion in crypto, according to the Basel Committee’s third-quarter 2022 report. The Committee collects data from 182 international banks, 19 of which own cryptocurrency assets.
Banks build their investment portfolios predominantly from volatile cryptocurrencies. The share of cryptocurrencies in the total assets of these 19 banks is 0.14%. At the same time, over 50% of the overall crypto-asset exposures belong to two banks, another 40% are divided between four banks. Among the crypto-owning banks, ten are from the U.S., seven are from Europe and two are “from the rest of the world.” All in all, cryptocurrency assets account for about 0.01% of the total assets of 182 banks.
The most popular crypto-asset is BTC, which accounts for 33% of investments. It’s followed by ETH with 22%. DOT and XRP account for 2% each, SOL and ADA for 1% each, and LTC and XLM for 0.4% each. Derivatives based on BTC and ETH represent 35% of total crypto-assets.
Among cryptocurrency assets held by banks, 50.2% are used for storage and insurance. Another 45.7% is used in clearing and to support market makers. The remaining funds are used for lending operations.
The report’s authors note that the data cited may not fully reflect the actual situation. According to the recommendations given by the Basel Committee, banks shouldn’t hold more than 1% of Tier 1 Capital in volatile cryptocurrencies.
For reference, the Basel Committee on Banking Supervision (BCBS) is a supranational organization responsible for developing unified standards and methods of regulating banking activities, particularly the assessment of bank capital, liquidity, and funding. The Committee consists of presidents of several largest central banks.
The BCBS operates in close cooperation with the Bank for International Settlements (BIS), which has recently successfully completed trials of a cross-border wholesale CBDC and launched a pilot project of a cross-border retail CBDC.
