Topic: Central Banks can hold up to 2% of their reserves in BTC since Jan 1st, 2025 (Read 119 times)

That's a game changer for Bitcoin. If all banks keep their 2% reserves in Bitcoin, then the price of Bitcoin will skyrocket and go to the moon, 1 Million dollars per coin will become more realistic. I think that many major banks will keep their reserves in Bitcoin. If a company like BlackRock got interested and involved in the Bitcoin ETF acceptance process, then it means that big guys are interested in investing in crypto. I think that they'll keep their reserves mostly in Bitcoin and Ethereum.

That's how it works. People don't have the skills to analyze the fact that banks keeping 2% of their assets in crypto will have more power on the price than Trump's any statements. People think that, for example, if Trump buys, then it's cool and everyone will buy while they don't analyze the real power of 188 trillion dollars.

if you read all the commentary of the consultation periods. majority of central banks associated with the BIS were pushing the BIS to start making regulations to allow them to invest in crypto. so although not a requirement to invest EG forced to buy crypto.. the banks actually wanted permission/allowances to invest in crypto, previously not allowed

From what I have seen, it seems only like an option. Articles are very deliberate with the words they use. The word ‘could’ is very telling. This tells me that if the banks wanted to, they could but it’s not a requirement.
In the shared quote, it says the 2% is a compromise from the 5% so I would assume that this is the maximum they are allowed to have.

funny thing is, with the EU being so tight on crypto with the Mica rules.. it turns out that of the banks that report to BIS, it is actually the EU that holds the most crypto of all them banks..(as of Q4 2023)
https://bitcointalksearch.org/topic/m.65014034

Once the banks fully embrace crypto that basically will green light any red light or yellow lights within organizations / governments that are still trying to make these decisions because at that point it will be much easier for them to have custody of these with banking custodial solutions that have been implemented and it will further legitimize Bitcoin as a result as well. Pretty freaking epic when you have every bank trying to get bitcoin on their balance sheet if its not already happening it will soon be. It will have a HUGE impact on our favorite coin 

to avoid breach they would need to increase fiat reserves to balance things out or sell assets to bring within limits

update(reading/de-jargonising latest final docs and smallprint today)
seems the bis basel committee hid a further limit which translates to the 2% buy-in(inflow) limit is of all instable crypto assets combined,
which each individual cryptoasset type within the group also has a limit.. meaning they cant just fill the 2% allowance with just bitcoin

p.s im sure america, uk, eu wont want to be part of the BIS in near future and instead want to set out their own international banking standards committee, seeing as BIS is the committee that is leaning towards offering CBDC and aiding in the BRICS process

I read about this institution, and it seems important and potentially powerful. It unites central banks of 60 countries, including all major European states, North America, major South American states, China, and India. It seems they've been working on this policy since 2022, and I do agree that even 2% is quite a lot of money (even for cryptos in total) if central banks choose to hold some funds in Bitcoin. Does anyone know whether the decisions by BIS are obligatory or recommendations? If a country whose central bank is a member of the institution wants to exceed the 2% limit, can they do it without leaving the institution or not?

for clarification(update d580.pdf):
i can only guess it seems they dont want a rampant buy up session by multiple banks during ATH season and instead wait until the correction season(post ATH)

also
they aim for 1% but can buy(inflow) upto 2% but would be in breach if they buy(inflow) above 2%
when hoarding crypto assets they have a 5% of fiat value of reserve limit before they have to sell(outflow)

also
to note they have 2 groupings. group 1 are stablecoins of trad-fi,  group 2 are well known instable coins and their partnered ETF's, pegged tokens, etc. so the 2% max buys may not be a total of just bitcoin, but a mix of some bitcoin some pegged bitcoin derivative, some altcoins and some ETF

also it appears(im still reading and de-complicating verbage of latest standards) that of the group2(which bitcoin fits within) which has its own 2% and 5% limits of the group, a further limit is implied per asset hidden in the small print. whereby of the 2% of total fiat reserve being group 2inflow limit. within group 2, a 5% of group 2 is a limit of each asset type. 0.1% is equal to 5%per asset type of 2% of group

meaning(example):  
privatekey/multisig(self custody) bitcoin is 0.1% of total fiat reserve
ETF shares of exposure to bitcoin is 0.1% of total fiat reserve
some wrapped coin pegged to bitcoin is 0.1% of total fiat reserve
some altcoin is 0.1% of total fiat reserve
[16 other assets of this class]

so having direct self custody real bitcoin stored by central bank may end up being only 0.1% of fiat reserves

also(still translating jargon to common)
there would be a breach if each asset goes above 0.3% of total fiat reserve

p.s seems the basel committee slid in a limiter in the small print. which seems to be where self custody of real bitcoin would have a inflow of 0.1% of total reserves limit and would require selling(outflow) at 0.3% of total reserves. and so banks would need to also buy etfs pegged tokens and derivatives exposed to bitcoins price to fill the 2% of total reserves

@franky1 has mentioned it several times in his posts over the past few months, but I haven't noticed that members are too excited about it. People pay more attention to a certain president and his promises, while on the other hand, news like this can have a much greater impact on the price of BTC - although it should be noted here that banks can have part of their assets not exclusively in BTC, but in cryptoassets as is said in the article.

Some will not agree at all with the fact that banks start buying and storing BTC, but it is still their decision and it remains to be seen whether everything will come down to individual cases or whether central banks will start investing en masse in cryptocurrencies.

As things stand right now, this could be a very exciting year for Bitcoin.

It's already been almost a month since The Bank for International Settlements (BIS) decision that Central Banks can hold up to 2% came into effect under their "Prudential treatment of cryptoasset exposures".

BIS initially was planning for a 1%, but when Central Banks asked for 5%, they proposed a 2% as a compromise.


Given that Central Banks are already looking into this, let's examine the impact this could have.

Let's be conservative and assume we continue with the proposed 2%, and not the 5% that banks want.

Banks have about $188T:


At 2%, this represents $3.76T in Bitcoin. For comparison, the current market cap of Bitcoin is $2.05T.

This, even at 2%, is a game changer for Bitcoin.