Australian Regulator Orders Reports on Banks' Exposures to Crypto Following SVB Implosion

In the aftermath of Silicon Valley Bank's (SVB) implosion, the Australian Prudential Regulatory Authority (APRA) has allegedly directed local banks to provide daily updates on their exposures to startups and crypto-related companies.

After the bank's closure, FVB Financial stated last week that it had officially filed for Chapter 11 bankruptcy protection in the US Bankruptcy Court for the Southern District of New York.

Australian Finance Watchdog Orders Improved Crypto Reports from Banks

As reported by the Australian Financial Review, the APRA has begun requiring that banks declare their cryptocurrency transactions and enhance their crypto asset reporting.

The regulator wants to learn more about banks' exposure to cryptocurrency and the dangers that come with it.

According to the same AFR report, authorities recommended that banks gather and share data on so-called de-banking operations, make their processes transparent and fair, inform the government of their risk tolerance, and consider investing in strengthening their capacity to bank specific industries.

Meanwhile, CoinTelegraph noted in a report that APRA's expanded banking sector oversight comes in the wake of previous large breakdowns in the global banking system, notably SVB and Silvergate.

On March 19, UBS Group decided to purchase Credit Suisse for $3.2 billion after the latter failed over the weekend, marking one of the banking industry's most recent failures.

Australian Banks Remain Stable, For Now

According to Barrenjoey analyst Jonathan Mott, the Australian banking system is holding onto its current stability, but it may be disrupted if consumers lose trust in the institutions.

The expert added that while smaller banks are doing well and have enough money to cover any withdrawals, the quality of loans they provide is deteriorating, and borrowing money is becoming more expensive.

ARPA's increased caution on crypto reporting comes as the Reserve Bank of Australia (RBA) and the Department of the Treasury has been conducting private negotiations with crypto platform Coinbase executives to discuss the future of crypto legislation in Australia.

Coinbase also consulted with the RBA's payments policy and financial stability divisions in mid-March, according to an RBA representative, Cointelegraph reports.

Governments Keep Close Eye on Crypto

Apart from the recent ramifications involving banks with ties to cryptocurrency startups, crypto has been a hot issue among regulators worldwide, with worries about money laundering, terrorist funding, and consumer protection.

ChipMixer, a cryptocurrency site popular among cybercriminals, was recently shut down by global authorities.

In Similar News

Earlier this month, Yahoo reported that Asian stock prices rose somewhat after a previous decline following UBS's rescue of Credit Suisse, which helped to halt the dumping of bank shares.

However, traders are unsure how Federal Reserve officials would respond to the financial system's stress. Interest rate futures trading in the United States suggests that the rate peak has either passed or will occur shortly. Worries about stability may take precedence over concerns about inflation.

Stay posted here at Tech Times for more updates.