An international committee of banking regulators has called for new rules for dealing with cryptocurrency, in an announcement that could lead to a new generation of \u2018prudent\u2019 regulation for the sector. The Basel Committee on Banking Supervision, which is comprised of delegates from leading international financial regulators, said a new conservative framework for regulation was required to tackle the risks created by the rise of crypto. Regulators from Japan, Europe and the United States were among those on the committee to back the announcement, which the regulator said would protect against the risks to financial stability and to banks directly from digital currencies and other crypto assets. The committee said in a statement that the immature nature of the asset class meant there were still significant challenges for regulators to deal with. \u201cCrypto-assets are an immature asset class given the lack of standardisation and constant evolution. Certain crypto-assets have exhibited a high degree of volatility, and present risks for banks, including liquidity risk; credit risk; market risk; operational risk (including fraud and cyber risks); money laundering and terrorist financing risk; and legal and reputation risks.\u201d The committee went on to suggest that banks engaging in cryptocurrency, both directly and indirectly, should do so with prudence, in light of the risks and volatility still inherent in many crypto markets. Furthermore, the regulator recommended that cryptocurrency should not be considered as collateral in many instances, including in credit risk mitigation, or as part of the net stable funding ratio. This treatment reflects the high degree of uncertainty about the positive realisable value of crypto-assets in times of stress.\u201d The report said central bank cryptocurrencies were outside of the scope of its considerations. While stopping short of recommending regulation for stablecoins, the committee said they \u201cwarrant further assessment and elaboration before specifying a prudential treatment." Founded in 1974, the Basel Committee has been long-term skeptical on the role and stability of cryptocurrencies, previously issuing a warning statement about cryptocurrencies back in March of this year. The call for regulation could indicate the direction of travel for some of the world\u2019s leading financial regulators, at a time of increasing compliance for crypto sector operators and investors.