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JPMorgan: Global Regulation is Critical for Banks to Assist Clients in Investing in Cryptocurrency

According to a JPMorgan executive, a globally consistent crypto regulatory framework is urgently needed to allow banks to handle crypto assets on behalf of large customers.

“A globally consistent regulatory framework is required.” It’s critical that we find a solution as soon as possible.”

A Global Regulatory Framework is Critical to Enabling Banks to Offer Crypto Exposure to Clients, According to JPMorgan

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Debbie Toennies, managing director and head of Regulatory Affairs at global investment bank JPMorgan Chase & Co., spoke Tuesday at an International Swaps and Derivatives Association event about global cryptocurrency regulation applicable to banks.

According to the JPMorgan executive, new rules are urgently needed to provide banks with certainty when handling crypto assets on behalf of large customers seeking exposure to this asset class.

A growing number of large institutions, including hedge funds, are interested in investing in and diversifying into the crypto asset class. Cryptocurrency has entered the “hyper adoption phase,” according to Wells Fargo.

Toennies, who noted that some very large players had asked JPMorgan to hedge their exposure to crypto assets, stated:

“I do believe we need a globally consistent regulatory framework.” It’s critical that we find a solution as soon as possible.

The Basel Committee on Banking Supervision, a group of global banking regulators, is debating how banks should deal with crypto assets. The Committee proposed dividing crypto assets into two groups and regulating them based on their market, liquidity, credit, and operational risks to banks in June of last year. The final rules, however, are not expected until at least next year.

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Toennies revealed that the global investment bank has been discussing “interim treatment” for crypto assets with various jurisdictions while waiting for the Basel Committee to establish applicable rules.

The head of Regulatory Affairs at JPMorgan elaborated: “The real risk to all of our economies is that if we don’t get to a solution that allows banks to engage with our clients in a hedged way, this activity will go outside the regulatory perimeter, and I am concerned about financial stability.”

Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.

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