The structure of the standard is unchanged from the proposal set out in the second consultation. Under the standard banks are required to classify cryptoassets on an ongoing basis into two groups: • Group 1 cryptoassets. Those that meet in full a set of classification conditions. Group 1 cryptoassets include tokenised traditional assets (Group 1a) and cryptoassets with effective stabilisation mechanisms (Group 1b). Group 1 cryptoassets are subject to capital requirements based on the risk weights of underlying exposures as set out in the existing Basel Framework.2 • Group 2 cryptoassets. Those that fail to meet any of the classification conditions. As a result, they pose additional and higher risks compared with Group 1 cryptoassets and consequently are subject to a newly prescribed conservative capital treatment. In addition to any tokenised traditional assets and stablecoins that fail the classification conditions, Group 2 includes all unbacked cryptoassets. A set of hedging recognition criteria is used to identify those Group 2 cryptoassets where a limited degree of hedging is permitted to be recognised (Group 2a) and those where hedging is not recognised (Group 2b).

Additional key elements of the standard include: • Infrastructure risk add-on: An add-on to risk-weighted assets (RWA) to cover infrastructure risk for all Group 1 cryptoassets that authorities can activate based on any observed weaknesses in the infrastructure on which cryptoassets are based.

• Redemption risk test and a supervision/regulation requirement: This test and requirement must be met for stablecoins to be eligible for inclusion in Group 1. They seek to ensure that only stablecoins issued by supervised and regulated entities that have robust redemption rights and governance are eligible for inclusion.

• Group 2 exposure limit: A bank’s total exposure to Group 2 cryptoassets must not exceed 2% of the bank’s Tier 1 capital and should generally be lower than 1%. Banks breaching the 1% limit will apply the more conservative Group 2b capital treatment to the amount by which the limit is exceeded. Breaching the 2% limit will result in the whole of Group 2 exposures being subject to the Group 2b capital treatment. • Other elements: Other elements of the standard include descriptions of how the operational risk, liquidity, leverage ratio and large exposures requirements should be applied to banks’ cryptoasset exposures. The supervisory review process and a specific set of disclosure requirements are also prescribed.