Bitcoin Forum

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The Basel Committee on Banking Supervision, a group of international banking authorities, has warned that the growth of cryptocurrencies poses a number of risks to banks and global financial stability.

The committee – part of the Bank for International Settlements (BIS), widely considered the central bank of central banks – published a statement on Wednesday, saying that potential risks for banks include liquidity, credit and market risks, operational risk (including fraud and cyber risks), money laundering and terrorist financing risk, and legal and reputational risks.

Although banks currently have “very limited” direct exposure to cryptocurrencies, institutions should still “at a minimum” carry out extensive due diligence and disclose any exposure to crypto assets to minimize the risks, the committee said.

Banks should further have a “clear and robust” risk management framework to deal with the “high degree” of risk posed by cryptocurrencies.

The risk management framework should be “fully integrated” into banks’ overall risks management processes, including those relating to anti-money laundering (AML), combating the financing of terrorism (CFT) and evasion of sanctions, the committee said.

A “comprehensive” assessment of the risks should be incorporated into their internal capital and liquidity adequacy assessment processes, it added.

Additionally, supervisory bodies should be informed of actual or planned cryptocurrency exposure, along with an assurance that the institution has fully assessed and mitigated the risks.

Finally, the committee said that it is working with other global standard-setting bodies and the Financial Stability Board (FSB) to arrive at guidance on “prudential treatment” of banks’ exposure to cryptocurrencies in order to “appropriately” reflect the risks.

Last June, BIS said in its Annual Economic Report that it’s hard to see if cryptocurrencies solve any specific economic problem yet. “Transactions are slow and costly, prone to congestion, and cannot scale with demand,” it said at the time.


Reference: https://www.coindesk.com/https-www-coindesk-com-cryptocurrencies-pose-risks-to-banks-and-financial-stability-warns-basel-committee

Well this has been discussed and just common sense will tell us that Banks clearly see crypto as their main threat that's why we have seen a lot of attacks from them specially in 2017 when Bitcoin and other crypto suddenly exploded and banks losing big profits from those who decided to switch their funds to crypto. So I'm not surprised by this the results of this so called committees. Obviously, crypto will have not a fair share of optimism coming from those banking elites so this news is not likely affect us.

Useless committee is not recommended to anyone. Because they are all the big whales in crypto community so all the committees are not supporting to cryptocurrency. Banks are centralised and controlled by government person so they stole the money in all the way. But Bitcoin is a decentralised cryptocurrency so completely transparent to everyone. My request do not cheat with peoples  because many uneducated peoples are trust the government policies but they only cheating the peoples emotion.

It is certain that it is not an illusion that banks fear that cryptocurrency is in serious competition with them. Yes, they are both used as method of payment but far from that again, some people use bitcoin and other good altcoin as investment. They withdraw a lot of fiat and convert to crypto, making the banks distablized and run into debt because of lack of fund.

More and more people start using cryptocurrencies and its obviously that banks have to take action against that since they know in the future bitcoin could potentially be a big threat to them. I think what they want to do is take action early since they know rigtt jow not many people will be against them and the chances of winning are higher. The longer they wait, the worst is for them because bitcoin gets new users and supporters everyday.

I can see people shifting from banks to cryptocurrencies in terms of investments, accruing interest with their money over time and money transfers that is cheap, fast and secure, but I guess the banks' strong and safe side that crypto can't match is its ability to lend people some money for their ventures and earn interest off of that. Another thing is that banks are somewhat tied with the government in controlling the economy in which cryptos could not take aid into given its nature. The banks are now coming into their senses that crypto is no longer the tool used for Darkweb purchases and money laundering now that people have realized that it is actually more than that.

Banks have been making a big change in users life, but what they charge to the users is big in comparison to the cryptocurrency. These days cryptocurrency wallets serve as one's own banking. Quite often committees come forward with some risks and solution. Here is one such, and surely cryptocurrency network will serve as a hard competitor to banking.

The risk as expressed in the article above is actually nothing new for the world of cryptocurrency, because a number of years ago, the risk was also revealed by various parties. However, this does not pose a threat to crypto, instead it makes crypto stronger and more developed to provide services that can be accepted by the wider community throughout the world. We are not all hate the banking financial system, only we are disappointed with the banking system that is currently being used so we turn to using blockchain technology to enjoy services that we cannot get in the banking system today.

The Basel Committee on Banking Supervision, the group that bother us with banking restrictions, KYC/AML, etc... the same group supposed "lobbying" a reliable financial system.

An alternative currency like Bitcoin can risk the economy maybe, but maybe we need to reset the financial system to get the Bitcoin mass adoption. Imagine, a fresh start with BTC as an INTL. currency.

It is a threat to banks because bitcoin is a bank. No need to put your funds into a controlled business that gambled it away and needed tax payer money to rescue them.

I think that the title of the article is really, really misleading.

They're not saying that bitcoin will necessarily be threatening the existence of banks or something like that. Rather, all that is being said is the fact that the volatility of a lot of the crypto assets on offer, which banks may be interested in investing, will pose a risk to the solvency or investment portfolio of banks. That's literally all.

However, I disagree with the statement made here:


You can already see increased adoption of bitcoin as a store of value, where fiat has been destabilised in countries such as Venezuela. Bitcoin can also circumvent draconian capital control policies that may prevent people from immigrating overseas, for example. So there are specific usage cases for sure.

We all already know that crypto could be a threat for banking system because all of the features of crypto is contradicting with the banking system, and crypto is something that the bank can't supervise, so there can be a lot of transaction that cant be taxed, so the country could lose its income, so I think the middle way to make crypto being adopted is to regulate it, and balance the usage between fiat and crypto, when crypto being regulated I dont think it could become a threat again

That's why the banking institution keep sponsoring the media to spread FUD so the cryptocurrency industry will lose some potential investors that can easily be manipulated based on news. It's no longer a news that the cryptocurrency industry pose a threat to the banking system since they have failed and lost alot of trust from the general public. The best thing now, is for them to accept blockchain technology and help speed up the adoption of the technology because it's the future and it will benefit them more if they make use of the technology for transpiracy and accountability.

Did they just admit that they are aware that central banks of countries are involve into investing in cryptocurrencies? This statement alone only tells us that the BIS know something about the central banks' involvement in the cryptocurrency market, which for a long time I myself doubt that governments are confident enough to enter on. Something tells me that future regulations won't really be about precautions or prohibitions in the crypto market but for them to gain the upper hand when it comes to what they are holding. 

Well I personally like the operational framework as it regarding the risk management from bank the connect with cryptocurrency and I this twill further the regulations of crypto activities in the global financial system. Despite the fact that banks have always been against crypto and have since seen it as a threat to it existence.

They are educating the public about the risk in crypto and not the risk on their business. Yet of course, people will indulge in cryptocurrencies and would definitely defer their input on banks.

I have encountered this discussion for almost a thousand times. Technically, Cryptocurrencies are the main threat of central banks because they can't even regulate it and will give them the feeling that they will not be able to centralize financial industry someday because of it. That is why central banks are trying to manipulate the cryptocurrencies as well by lowering it down and destroying their reputation.

That's right, banks are more useful these days but that's just because more people are using them and right now it is easier to make transactions to different companies as payments. But this has to chance in the future since banks are sometimes corrupt and their fees could be very high depending on what type of transaction you make.

This kind of news has been coming up for these past few years. It nothing new to crypto currency user that has been there form the start. Yeah, it pose risk to them because they are now lacking investor or depositor in their banks.

Banks have been innovating and looking at how they can imply the system of crypto currency at their advantage so that investor and depositor would choice them over crypto currency.

Banks do not have to get scared about potential of bitcoin in our world and what it can do to them, banks need to be excited about the potential of bitcoin and blockchain technology and how it could improve them and make them better.

I know there are tons of banks who deal in the shady business world and bitcoin is definitely going to ruin that for sure but any bank that is doing business in a legit way should see bitcoin and blockchain as an improvement to the old system and instead of being afraid of it should adopt it.

If the world is moving towards a new and better system and if you are trying to keep people away from it than all you can do is slow it down, you can't stop it, you can pay politicians billions and make bitcoin illegal all around the world and yet people will still find ways to use it so instead of trying to stop it I would suggest supporting it so you can get behind the economic evolution.

It is totally understandable the position of banks, nowadays, the desire to control this emerging economy thanks to Bitcoin and Altcoins, based on blockchain technology, will continue to increase.

The best of all is that they can never control it, because it is a market economy that depends totally on Supply and Demand, which capitalizes large amounts of money. And more and more regulations will come out, more laws will come out in prosperous countries, but there will always be outlets for people.

The reason why they will never be able to control technology is because banks will always want to centralize technology, and everyone's idea of ​​cryptocurrency is decentralization, and those people who achieve their financial freedom will always defend that economy different from the traditional economy.

From the point of view of an economist studied at a university, they have learned to model economic processes based on stable actions, but when market volatility enters, economists are left without tools to study markets.

And for economists, for them the best will always be security based on their analysis, risky processes can take them but with a low percentage of tolerance. It is for this reason that the advisors of most of the banks do not recommend bitcoin and altcoins and urge people to invest in their credit and investment plans.

Cryptos sure as hell pose the risks but not the ones states by the Committee. Cryptos show that banks are basically useless exploitators that take more than they give. You are not likely to be able to have a free bank account with no annual/monthly payments and high fees per transaction (in percentage). Cryptos allow that. Banks can also go waste your money on a bunch of stuff only because of being sure that you won't really come and take all of it from your bank accounts. Blockchain wallets don't. And crypto wallets are not likely to be hacked if one is careful with the private keys and stuff, whereas banks get robbed regularly. Not to mention that cryptos grow with time, while fiat necessarily gradually loses its value.

just like when engine was invented and horse and carriage went out of business and became obsolete, banks will eventually become obsolete as bitcoin and in general decentralized money becomes popular.
that is how the world has always worked from the beginning of the world, you can't fight it.

the only way banks can survive this transition longer is if they adapt with decentralized world. start offering services to bitcoiners and things like that.

As if banks are the guardians of global financial stability. Remember they caused the 2008 crash and every single one of those before that.

People are discovering they have alternative ways of keeping their money and making profits. Banks better step up their game and provide actual benefits to their customers and not hold their money hostage.

This is something that would happen in ideal world. But in real world banks will survive and cryptocurrencies will not replace fiat money. Yes, banks would have to adjust and they will with time, they will probably also start to offer their crypto related services to clients. But at the moment without regulation and legal framework cryptocurrencies can't be so easily embeded in financial system without huge risk that should be accepted. Everyone who knows something about finances is aware of this.

I am not surprised at all looking at the committee who made this statement. Banking business is seeing this one as a direct threat to their business and hence they are making every effort to uproot the crypto business by refusing banking services to the crypto related companies! This thing is on going in India and Canada since last one year and JPM also joined this list last month. Such kind of efforts of banks always remind me a great quote from our national hero "Mahatma Gandhi" who is internationally esteemed for his doctrine of non-violent protest,

"First they ignore you,
then they laugh at you,
then they fight you,
Then you win!"

And we are at the third stage now where banks are taking the fight to the next level!
 

slowly banks became interested in blockchain technology. In the coming days, many banks will form their own money.. they wi ll enter the market and try to dominate. therefore we should support decentralized coins such as bitcoin...

I don't think crypto will kill banking, more like banking would adopt blockchain to remain competitive. I do think they are somewhat worried. Every dollar stored in a crypto wallet is money the banks can't get their hands on (until it's sent to an exchange to cash-out of course).

And no one is scared. As a result of some research or analysis someone just stated a fact that if BTC will be globally used then current banking system will suffer because it is not adopted to such changes. Unfortunately, some retards interpret it as a strong fear but the truth is that Bitcoin won't grow that much  to cause any significant harm to current banking system. Even if it will then it should probably take much time and banks will use it to adopt crypto into their businesses and get their revenues.
But tbh I can hardly believe it will happen.

These risks do not pose a direct threat to the existing banking system. Previously, research has been conducted on this issue and it has been directly stated that it does not pose a threat to cryptocurrency for banks. The laundering of dirty money and the fight against the financing of terrorism is a common problem of the global financial system, not just cryptocurrency. These risks existed before the advent of cryptocurrency.

In my opinion they don't like crypto because they not make so much money now as on old times from people who take loan from banks and pay a lot, but crypto not pose any risk to banks.

I think its just a ploy to condition the minds of the people to make cryptocurrency as bad as possible since crypto could be a threat to their existence. Although I think one way or the other, banks will start to embrace it in order for them to survive and I think it is starting to happen right now. :)

They are scared, not interested.

As far as I know, I read about banks studying the possibility of Blockchain technology to them. But the fact that they are bothered means that they are scared of what might happen and that might be the reason why they are scared and want to use the technology of Bitcoin to improve and develop their services. Banks will not form their own money, the government might and I think it will still be the fiat that we know but in a better form.

before the bank embraces it, the government usually gives a signal to accept cryptocurrency. after that a law was made to regulate it, so that the bank would embrace it in accordance with the regulations made by the government. of course this is done so that the country's economy has no obstacles, which are concerned with the bad possibilities that occur

Going out from house is so risky, they should stay at the home too, don’t go to the bank, and using bank is also super risky, can we stop using bank because it is risk? What about thieves? Hackers? Boys girls, computer mining gigs, everything is risk, I think they’re extremist by being super insecure.😂

You are right! Most countries that are cryptocurrency friendly had some of their local banks already started to explore the possibilities of blockchain technology and did some strategic partnerships with leading industry innovators. This I think would be intrumental for other banks to follow suit since they might be thinking that if they don't adopt it then they will be left behind in the competitive banking industry. Imho.

That is why they are being consumed by their insecurity while other nations are studying how they can benefit from cryptocurrency using the blockchain technology. I think their fear is what cryptocurrency pose as threat to their pocket and not to the banking industry.

They care more about the money they get through the money people deposit to their bank and the levies they impose on the owners of the funds, but I don’t see anyway cryptocurrency pose threat to banking industry generally, because crypto is created for payment and since cash will always be involved in order to have access to crypto, bank will always be functioning.

Banks operate in a very similar way than politicians. The first thing they do when they want to achieve a controversial goal is to scare people into thinking that they need the thing that they want to implement. Example : The government want 100% surveillance into people's private live, so they scare them with strategic words like, "terrorism" and "Money laundering" and "hate crimes", before they propose a new Bill or regulation that allows them to infringe on the citizens private finances and their daily activities.  >:(

This is exactly what Banks are doing now, to scare people before they find an excuse to "ban" Crypto currency activities, linked to Banks.  >:(

I agree, by exposing the shortcomings, the bank seems to spread the news that is not entirely true. but this is certainly driven by the government which actually plays the most basic role

Hell yeah they do, the only reason why the cryptocurrencies were created is to risk banks, the banks have been working together for so long and have no competition that they are basically ruling over countries now. Look at countries like USA where banks and other huge companies pay politicians to do whatever they want and they do it because of the bribes, USA is literally run by corporations at this point.

I can't really think why would we allow that to continue, of course we were going to do something about it and crypto currencies are the first step, becoming bankless would make them get weaker in the end and if we can find ways to decentralized communication and internet we will make sure telecom companies can't do it neither and internet with great global reach makes sure people who we used to go to wars with are there and we can discuss it instead.

We are taking away all the bad stuff thanks to new inventions like crypto and building a much better world.

Aside the fact that the system is capable of exposing their shortcomings, the system will sure block their illegal means of revenue generation; I call it illegal because some of the charges they slam on their customers are uncalled for.

The most terrible thing is after keeping money with banks for so long, you end up not getting reward from it even after they have used the money for business, whatever profit they get, they ether pack it for government officials who feels they are above the law. Now that we have a blockchain technology that has reward system for keeping my money on it, I see no reason why.

At the same time, the European Central Bank announced the results of its research, in which it acknowledged that the cryptocurrency does not have any serious impact on the global financial system. It is not only about negative influence, but about any influence in general. This only indicates from which side they approach the consideration of this question and that these are rather subjective opinions. Cryptocurrency is still too short to conclude whether it will have a significant impact on the international financial system.

Banks are just like any business, they want to generate profits for them and their shareholders, even if they do not want to admit it they have a monopoly that has run unchallenged for hundreds of years and now finally a competitor has appeared and they are not willing to take the risk of competing against bitcoin and losing, this is why they want to ban it and to create all kind of regulations that suffocates this market but it will not work no matter what they do.

You know, things like this are what makes me wonder what is the main purpose of Bitcoin and who exactly is behind it? I read what the Basel Committee said about Cryptocurrency and they were able state out some facts which are true about Cryptocurrency.

But there are a lot of us who are the good guys and loves Bitcoin, what exactly are we going to do since the bad guys have decided to ruin everything? There are lots of bad guys and Bitcoin being anonymous now gives them the chance to do whatever they wish to do because they know that no one is going to question them for whatever they do.

The truth is that bitcoin is just a tool, and like any tool it can be used for both good and evil, the real question is if the benefits bitcoin brings to our society outweighs the problems it will create? And to me this is a clear yes, bitcoin will cause some problems but the benefits are simply too great to ignore, but banks are trying to amplify the negative aspects of bitcoin and to downplay its benefits because they know that if bitcoin wins and becomes adopted all over the world their business model will become obsolete.

Banks thrive on fees just as much as crypto exchanges do. It's only a matter of time before banks will compete and potentially even gain an upper hand in this market due to the convenience they offer over exchanges.

You no longer have to send your private information to an exchange you don't know, no longer have to wire money to an exchange you don't know, and you know that the bank won't freeze or lose your funds like exchanges do.

The crypto ecosystem is more fragile than the banking system. Institutions will take over this space slowly but surely.

It is not as much of a risk as it used to be honestly. Back in the day it was the idea that people who use bitcoin would create issues for banks and if bitcoin became a global currency that people use instead of the government money then banks would be in big trouble since they make money via money and without money they would be bankrupted.

However, nowadays bitcoin became something for people to make more fiat money, they put in 100 dollars and buy bitcoin and it goes up so they sell it for 120 dollars and "profit" instead of actually using bitcoin, it is just another investment instrument to make more fiat currency for people, that resulted with less risk to banks and now banks use blockchain for transactions which makes it cheaper and faster for them even though they didn't drop the costs for people so they are making more money.

I think the main point is bitcoin is no longer posing that risk but at least it has the technical possibility of it.

We don't really know which direction bitcoin is going but we know that which direction it was suppose to go. It was created to pose a risk to not only banks but the current monetary system we have right now, which of course includes banks as well. However than it became something different, not many people used bitcoin as it was suppose to use, its no longer the currency it suppose to be. That is why banks are a bit afraid, they know what exists in bitcoin and they know that it could be very bad for them but they also know that people do not care about innovation they only care about their own greed so if banks could turn it into their own profits than they will but if we do not allow them than they will be in big trouble.

Are they just realised that now? Bankers should know that cryptocurrency was established to take their jobs and the early their understand this the better for them. Bitcoin is the greatest treat to they job right now and those that has indept knowledge on cryptocurrency and enthusiasts will agree that at the “back end”, bankers and the elites are those that are going to lose out at the end if the populace understand the benefits of using cryptocurrency for financial transactions an how safe it is to invest in cryptocurrency!

I still think that bitcoin became something the banks will love instead of hate. They are literally looking into it knowing what it could help them with. I can't believe that bitcoin was created because of the 2008 crisis against banks to have a leverage as the people to not use banks and be our own bank accounts etc etc but then it became such an investment thing instead of product itself that banks are literally building their own blockchains now an partnering with some altcoins now.

That is why I think basel comittee can take their warning and shove it up their place where sun doesn't shine because crypto currencies are unfortunately not posing a risk to banks at all, I wish it did but it doesn't.

How can crypto pose risks to the banks,if they aren't using it?
The bank clients might be using crypto at their own risk,but that doesn't increase the risk for the banks at all.
Totally blank statement. >:(

All these things are just speculations and what we create from our mind, it has not happened in reality for us to know if it is indeed a threat or not, so I count it as assumption. This same banker we say are against Bitcoin and thinking it will create loss of job are the same bankers that said Bitcoin poses no threat which I also read in another article posted in this forum.

The world generally is tending towards the use of artificial intelligence, and the more some of these things gets developed, The more the direct use of human labor for so many things gets reduced. So it is not only crypto that may threaten their job, but technology generally.

The risks are staying behind and not catching up with the norms of the day. For example a bank that is not even looking into blockchain technology will be left behind and the innovations will  make sure they lose profits.

China for example is not looking into blockchain at all and they are making sure they do everything in their power to stop the crypto revolution but it won't happen at all, that is why the Chinese banks will be left behind whereas other banks in Europe and USA will be getting stronger and faster while profiting even more which will result with dollar and euro gaining power over Chinese yuan. So, the risk here is not for banks that take advantage of the situation and building a better economy but for banks that stay behind and not deal with the cards they were dealt.

The BASEL Committee has various risk management measures that global banks have to adhere to- from leverage ratios to capital adequacy ratios. Whereas if banks are crypto friendly then it would have to amend these and add crypto inclusive ratios.
Their main concern seems to be the financial revolution that the crypto assets can bring about. The positives are multiple but it brings along a very unregulated space along with volatility and risk.
But their view on crypto majorly encompasses threats related to liquidity, credit, market, operations of fraud and cyber threats. They also are averse and frightened of money laundering, terrorist financing, as well as legal and reputation risks.
Since the BASEL norms are uniform across the globe. This can pose a banking sector specific altercation.

Cryptocurrencies pose potential risk to the banks because they represent totaly different financial principles and under their influence they might need to change they do their business. In.a way cryptocurrencies are competition to banks because they are their alternative. And the reason why banks are not using cryptocurrencies yet is strict regulatory framework and risk assesment that doesn't allow that to them but I beleive that will change in the very near future.

Over time, the valuation of decentralized cryptocurrencies by governments and banks will change, and possibly not for the better. So, recently in a recent report, G7 countries and the Bank for International Settlements announced that bitcoin and other cryptocurrencies are not a safe investment and a reliable repository of value. While there is nothing dangerous for cryptocurrency, however, nothing good is also here. You should probably expect that the legalization of a decentralized cryptocurrency will slow down again or will not be fast enough.

   Did anyone expected legalization to be fast? Crypto-currencies will need to get much more popular before we see legalization and
adoption.
   I agree with Basel Committee, crypto-currencies are the threat for banks, they have chance to change the economy we know.
From centralized and carefully controlled system to decentralized, open-source, transparent system. It will just need a lot of time
for more people to join and once there is enough people supporting crypto-currencies we will see the changes.

This is not a surprising report by the supervisory authorities of the banking sector and it is indeed a true that if merchants around the globe start accepting bitcoin or other crypto for global transactions then it could affect the banking sector as export and import will directly deal with bitcoin and other similar currencies and the huge profit they are earning will be gone, so it is not a big surprise what they are trying to do here.

Cryptocurencies pose highest risk to central banks. Risk to banks is small. Risk to central banks is fatal.

The main purpose of BTCitcoin is to have a free trade globally without any restrictions and why is it necessary to know who is behind the creation of BTCitcoin and what does it change. Basel committee gives a report about the dangers of their banking business if BTCitcoin is widely adopted and at the moment they find that the transaction charges are high and it shows the scaling issues present in BTCitcoin.

There you are wrong again, BTCitcoin is not anonymous and anyone doing illegal activities with BTCitcoin will be caught and you can see many evidence if you just have a normal search :P.

Exactly, it's about approach. I think that things are shown out of context. I wouldn't say that cryptocurrencies itself pose a risk to banks but unregulated cryptocurrencies without defined legal framework pose a risk.
On the other way it's true that cryptocurrencies in current forn don't represent a risk or impact to global financial system because formaly they are not a part of it.
Banks are also aware that cryptocurrencies are here to stay but they are also trying to find the way for cryptocurrencies to be part of financial and economy system without negative impact and properly regulated.

Since many people prefer to do transaction using cryptocurrency, bank profit from money transfer fees is continue to drecrease. This is the failure of bank, bank can not provide fast and low fees of money tranfer. Bank should provide service that can satisfy customers, if bank can not do it then bank will not survive in this busines world.