Australia wants banks to report crypto transactions
- Credit Suisse buys UBS Group for $3.02 billion after the latter failed.
- Credit Suisse and other financial firms have been hit by the banking contagion
According to reports, banks have been asked to report and provide updates on transactions involving crypto assets by the Australian Prudential Regulation Authority.
The announcement is made in light of previous banking sector failures regarding Silicon Valley Bank (SVB) and Credit Suisse. After failing to raise US$2.2 billion to cover losses from asset sales, US Treasuries were mainly affected by rising interest rates, with SVB unable to survive in the US.
These events led to a bank run in the United States and raised investor concerns about the state of the banking industry as a whole. In addition, UBS Group and Credit Suisse entered into an agreement on March 19 for the latter to buy the former for $3.2 billion after the latter failed over the weekend.
Unprepared for bank contagion
The general public was unprepared for the bank contagion that started earlier this month. Three well-known financial firms fell like dominoes, victimizing the United States. Although Credit Suisse is in trouble, many people, including Citigroup, believe that European banks are safe and unlikely to experience a SVB 2.0 scenario.
In fact, regulators around the world have begun to describe the state of banks in their various areas. Australian banks are “undoubtedly sound”, according to Reserve Bank of Australia Assistant Governor Chris Kent. The official went on to point out their strong capital and liquidity buffers. Banks, meanwhile, have been asked to disclose their exposure to crypto-focused projects and startups as a hedge.
According to the Financial Review, the Australian Prudential Regulatory Authority instructed banks to “improve reporting around crypto assets and submit daily updates” to the organization, citing information from three named individuals. This action has been taken to gain more knowledge about system vulnerabilities.
Relay crypto transactions
According to reports, banks have been asked to report and provide updates on transactions involving crypto assets by the Australian Prudential Regulation Authority.
The announcement is made in light of previous banking sector failures, including Silicon Valley Bank (SVB) and Credit Suisse. After failing to raise US$2.2 billion to cover losses from the sale of assets, mainly US Treasuries, which were affected by rising interest rates, SVB was unable to survive in the US.
These events led to a bank run in the United States and raised investor concerns about the state of the banking industry as a whole. In addition, UBS Group and Credit Suisse entered into an agreement on March 19 for the latter to buy the former for $3.2 billion after the latter failed over the weekend.
These new regulations in Australia are part of APRA’s expanded banking sector oversight. Cointelegraph.com reports that APRA has started asking banks to disclose their exposures to start-ups and businesses engaged in the cryptocurrency industry.
To learn more about bank exposures to cryptocurrencies and related risks, they are also said to have forced the banks to provide APRA with daily updates.
Steve Anderson is an Australian crypto enthusiast. He has been a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralization, understanding the true potential of the blockchain.
