Bitcoin prices have surged to $38,250, as the world’s most influential banking regulator Basel Committee proposed stringent capital controls for institutions with exposure to the flagship digital currency. The Basel Panel is looking to assign crypto assets to the highest risk category with a risk weight of 1,250%. The development comes at a time when consumer interest in the exploding crypto scene is rising with many financial firms offering transaction services in digital assets.
Headquartered in Switzerland, the committee suggested dividing crypto assets into two categories: assets and stablecoins eligible for treatment under existing rules and cryptocurrencies like Bitcoin that cannot be treated under existing rules.
While the panel hasn’t defined a timeline for the rules to take effect, it has invited stakeholders to offer their comments till Sep 10.
The news pushed Bitcoin prices up by 5.1% to nearly $38,250 from $36,440.
Almost half of millennial millionaires have at least 25% of their wealth invested in cryptocurrencies. According to CNBC’s Millionaire Survey, nearly 47% of the respondents had more than a quarter of their entire worth parked in crypto assets.
The results underlined the role played by the generation gap in investment decision-making. Young millionaires had spotted the potential in crypto markets at an earlier stage and capitalized on the burgeoning demand later. Meanwhile, older millionaires were unlikely to place their trust in cryptocurrencies.
Wealth management firms are expected to evolve their approach to clients, as younger millionaires riding the crypto wave, choose digital assets over traditional options like stocks, bonds, private equity, and mutual funds.