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The Economic and Monetary Affairs Committee of the European Parliament has passed measures requiring banks holding cryptocurrencies to set aside a punitive amount of capital.

In an opinion of 24 January, the European Parliament announcement the committee had voted overwhelmingly in favor of amendments to its capital requirements regulation and its guideline on capital requirements for banks holding crypto. According to a bill, banks would be required to socket a “risk-weighted exposure amount” of up to 1,250% of principal based on crypto exposure.

The legislative institution said the changes were in line with those of the Basel Committee on Banking Supervision, or BCBS, the body responsible for international banking standards. The group published consultation documents in 2019, 2021 and 2022 which explored the division of crypto assets into groups and recommend how banks should manage potential risks. BCBS reported that banks’ exposure to crypto assets in 2021 was over $9 billion.

“[Members of the European Parliament] also want banks to disclose their exposure to crypto-assets and crypto-asset services as well as a specific description of their crypto-asset risk management policies,” the legislature said. The Commission has been invited to submit a legislative proposal by June 2023 on a prudential treatment dedicated to exposures to crypto-assets.

Related: ECB Executive Board member presents his plans for the digital euro to the European Parliament

The entire European Parliament will have to vote on the proposed amendments for them to become law. Approval of the Economic and Monetary Affairs Committee followed EU lawmakers in October 2022 moving forward on the Framework for Crypto-Asset Markets, or MiCA, following a vote by the European Council – the law is expected to help create a consistent regulatory framework for crypto across EU member states .