Citigroup UK head: Regulatory agencies must re-examine cryptocurrency restrictions on banks

According to Bloomberg, Tiina Lee, the head of Citigroup UK, stated at TheCityUK's annual conference that as the cryptocurrency market develops, regulators should re-examine the current "restrictive" policies on banks holding cryptocurrency assets. She pointed out that the upcoming global regulations require banks to allocate a risk weight of 1250% for encrypted assets, which means that banks need to reserve 125 pounds of capital for every 100 pounds of encrypted assets they hold. This requirement essentially hinders regulated agencies from participating in the market. Lee emphasized that in the context of the Trump administration's strong support for the development of cryptocurrencies, regulatory agencies need to weigh whether to push cryptocurrency assets into the shadow banking sector or incorporate them into the mainstream financial system through appropriate regulation. She believes that this will become an important topic of discussion in the industry. Current policies may lead to cryptocurrency trading shifting towards less regulated areas rather than developing in a supervised environment.