Bitcoin in the hands of a child. The boy holds a metal coin of crypto currency in his hands.

Citing growth in the crypto-asset space and potential risks to banks and the financial system, the Basel Committee on Banking Supervision has published a discussion paper that seeks feedback on how regulators should design prudential requirements for crypto-assets.

Among other things, the paper sets out principles to guide the development of possible capital and liquidity requirements for banks’ exposure to risky crypto-assets. It also examines the features of crypto-assets that should be considered in setting prudential requirements.

The Basel Committee said that if banks are allowed to acquire crypto-assets or provide services in the emerging crypto space, it believes regulators should “apply a conservative prudential treatment to such exposures, especially for high-risk crypto-assets.”

If the regulators decide that minimum global standards are required for banks’ crypto exposures, the Basel Committee said that it would issue another consultation paper detailing specific proposals and seeking industry feedback.

“Any specified treatment would constitute a minimum standard for internationally active banks,” the Basel Committee said — although it noted that local regulators would be free to set tougher standards, or to ban banks from dealing in crypto altogether.

Comments on the paper are due by March 13, 2020.