What Are the Implications of Basel III for Traditional Banks Entering Crypto Prime Brokerage?
Basel III imposes strict capital and liquidity requirements on banks. For banks entering crypto prime brokerage, they must hold significant capital against the volatile and high-risk crypto exposures, making it potentially capital-intensive.
The lack of clear regulatory treatment for crypto assets under Basel III also creates uncertainty, often leading banks to treat crypto exposures as the highest risk category.
