BIS Urges Crypto Service Providers to Adopt Bank‑Level Prudential Rules

The BIS, which coordinates central bank cooperation, observed that major crypto asset service providers are offering products that resemble deposit‑taking, lending, market‑making and derivatives. These activities generate credit, liquidity and operational risks similar to those faced by banks, yet many firms operate without comparable prudential safeguards.

BIS states that large crypto service providers function like multi‑finance intermediaries, providing deposit‑taking, lending, market‑making and derivatives services. It advises these firms to hold capital and liquidity buffers and to meet governance, risk management and stress‑testing standards. The BIS signals that tighter regulation may follow as crypto firms integrate further with traditional finance.

If regulators adopt the BIS’ guidance, crypto firms would need to set aside capital against loan exposures, maintain liquidity cushions for withdrawal shocks, and implement board‑level risk oversight akin to banks. This could raise operating costs and constrain aggressive yield‑offering products, while potentially increasing market confidence among institutional investors.