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The European Green Party has introduced its amendments to the legislation that increase the capital requirements of banks using cryptocurrencies.
European Union (EU) Green Party MP Ville Niinistö has proposed amendments to the Financial Services Act that would restrict European banks using cryptocurrencies.
The document states that crypto assets that are considered overly volatile or risky and fall under Class 2 will have the most “cautious” rating. Essentially, this means that they will not be able to lend on the basis of digital assets.
“The total share of Class 2 crypto assets should not exceed 1% of the capital of tier one institutions,” the proposal says.
Class 1 crypto assets, which are considered less risky and include regulated stablecoins and securities using distributed ledger technology, will receive more flexible capital requirements and will have no restrictions.
The proposal was supported by a Finnish member of the European Parliament. However, Niinistö’s plan will need support from other lawmakers from the parliamentary Committee on Economic and Monetary Affairs – a hearing on the issue is due in December – and from EU governments.
In June, Presight Capital cryptocurrency expert Patrick Hansen warned that the regulator intends to strengthen supervision over the mining of cryptocurrencies on PoW, DeFi and stablecoins.
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