The 1% publicity restrict applies solely to Group 2 property. It implies that as a result of Group 2 property are extraordinarily dangerous, banks will not be allowed to have a lot in the way in which of publicity to them. Within the instance above, J.P. Morgan has Tier 1 capital of 13.7% of whole risk-weighted property. So for J.P. Morgan, whole Group 2 crypto asset holdings (together with bitcoin) can’t be greater than 0.137% of its whole risk-weighted property – and significantly much less of its whole property unweighted for danger. Admittedly, for a financial institution the scale of J.P. Morgan, that’s nonetheless a whole lot of bitcoin. Nevertheless it’s price remembering that the earlier model of the BIS proposals, issued in June 2021, didn’t impose a complete publicity restrict. So, removed from encouraging banks to carry bitcoin, the revised proposals truly make it harder.
