Nineteen major banks in North America and Europe have collectively invested a substantial €9.4 billion ($10.27 billion) in cryptocurrencies, as disclosed by the Basel Committee on Banking Supervision (BCBS). The committee’s latest findings are part of a supervisory initiative aimed at monitoring crypto-asset exposures within the financial system.
Over the past five years, the BCBS implemented a new crypto data collection template, revealing the extent of cryptocurrency engagement among its member banks. Among the disclosed investments, North American banks lead the way, with ten entities reporting their involvement, while seven European banks have also disclosed their exposures.
These investments cover a range of digital currencies, with Bitcoin and Ethereum emerging as the most prominent, constituting 31% and 22% of the portfolios, respectively. Investment instruments related to Bitcoin and Ethereum make up an additional 25% and 10%. XRP, another major cryptocurrency, represents €188 million or 2% of the total investment, with two banks holding over half of this exposure and four others nearly 40%.
The banks’ portfolios are diversified across various other cryptocurrencies, including Polkadot (DOT), Cardano (ADA), Solana (SOL), Litecoin (LTC), and Stellar Lumens (XLM). Stablecoins and tokenised assets also feature prominently, making up nearly 90% of the reported exposures by these institutions.
In a notable development showcasing the increasing acceptance of digital currencies within traditional banking systems, Banco Santander has taken a significant step by facilitating transactions in Bitcoin and Ethereum for clients in Switzerland. This move underscores a growing acknowledgment of digital currencies as legitimate financial instruments among established financial entities. The disclosures from the BCBS shed light on the evolving landscape of cryptocurrency investments within major banks, reflecting a notable shift in the financial industry’s approach to digital assets.