January 31, 2024
Secretariat of the Basel Committee on Banking Supervision
Bank for International Settlements
CH-4002 Basel, Switzerland
Japanese Bankers Association

JBA comments on the BCBS Consultative Document: “Disclosure of cryptoassetexposures”
Dear Basel Committee members:
The Japanese Bankers Association1 (JBA) appreciates the opportunity to provide our comments on the BaselCommittee on Banking Supervision’s (BCBS) Consultative Document: “Disclosure of cryptoasset exposures”
released on October 17, 2023.
The JBA supports the BCBS's efforts to address the risks associated with cryptoassets. However, regarding thedisclosure of cryptoasset exposures, we believe certain aspects should be reconsidered.
We hope that our comments will contribute to further discussions at the BCBS.

Materiality
The document illustrates that an exposure exceeding 5% of the bank’s total cryptoasset exposures is consideredmaterial. However, since cryptoasset exposures may be relatively insignificant for banks2, with limited impact
on risk profiles, it is not rational to mandate disclosure solely based on the proportion of individual cryptoasset
exposures to the total cryptoasset exposures. In light of this, it is desirable to define materiality by considering
the proportion not only to the total cryptoasset exposures but also to all exposures, including non-cryptoassetexposures.

Group 1a cryptoasset exposures
We recognise the potential for additional risks linked to the infrastructures of cryptoassets due to their novelty.
However, as set out in the BCBS “Prudential treatment of cryptoasset exposures,” Group 1a cryptoassets,tokenised traditional assets, have the same level of credit and market risk as the traditional (non-tokenised)
form of the asset3. Furthermore, we understand that additional risks linked to the infrastructures are being
The Japanese Bankers Association is the leading trade association for banks, bank holding companies and bankers associations inJapan. As of October 1, 2023, JBA has 114 Full Members (banks), 3 Bank Holding Company Members (bank holding companies), 76
Associate Members (banks & bank holding companies), 50 Special Members (regionally-based bankers associations) and one SubAssociate Member for a total of 244 members.
2 In the BCBS “Banks’ exposures to cryptoassets – a novel dataset,” a part of Basel III Monitoring Report (September2022), it is shown that total cryptoasset exposures make up only 0.05% of total exposures on a weighted average basis
across the sample of banks. (https://www.bis.org/bcbs/publ/d541_crypto.pdf)
3 https://www.bis.org/bcbs/publ/d545.pdf (Please refer to 60.9(2).)
11addressed by the infrastructure risk add-on. Therefore, we would like to propose that Group 1a cryptoasset
exposures should be subject to disclosure only when weakness is observed in the infrastructure used for theGroup 1a cryptoassets, and the infrastructure is subject to the infrastructure risk add-on.

Technical change
The title of column (g) in Template CAE 1 should be revised from "Cryptoassets under custody" to "Marketvalue of cryptoassets under custody" since column (g) is to report the market value of cryptoassets undercustody by the annotation.
***We thank again the BCBS for the opportunity to comment on the Consultative Document and hope ourcomments will contribute to further consideration in the BCBS.
Yours faithfully,Japanese Bankers Association2