Basel Reportedly Aims for Friendlier Crypto Bank Guidelines

Global banks may soon take a more favorable view of cryptocurrencies as the Basel Committee on Banking Supervision (BCBS) prepares to revise its benchmark guidance on crypto exposure, according to a Bloomberg report published Friday.

Second to Bloomberg, citing sources familiar with the matter, the 2022 guidance of the Basel Committee on the treatment of banks’ crypto will be updated next year to be more favorable. This follows the issuance of previous standards in 2022, with most banks interpreting it as a signal to avoid crypto altogether.

Bloomberg sources said that the Basel Committee recently held discussions on the appropriateness of the previous rules, which the United Statesthe United Kingdom and the European Union have yet to fully implement it.

The need for new rules arose from the rapid growth of stablecoins, which were not long ago regulated in the United States by the GENIUS Act and are now allowed for use in payments.

Under existing Basel rules, stablecoins issued on public blockchains are subject to the same capital charges as riskier assets, such as Bitcoin (BTC) or ether (ETH). This equivalence has drawn criticism from market participants who argue that regulated, asset-backed stablecoins pose much lower risks.

A powerful body that sets standards

The Basel Committee is a global body that sets international standards for banking regulation, focusing on capital adequacy, risk management and supervision. Its rules, like Basel III, ensure that banks around the world remain stable and resilient, presumably reducing the risk of global financial crises.

Related: The Basel Committee suggests introducing maturity limits for stablecoin reserve assets

The comments follow Chris Perkins, president of the investment company CoinFund, saying in mid-August that the capital requirements for banks set by the The Basel Committee creates a “chokepoint“designed to throttle the growth of the crypto industry. He said at that time:

“It’s a very nuanced way of suppressing activity by making it so expensive for the bank to do activities that are like, ‘I can’t.’

Related: Basel Committee finalizes crypto exposure rules for banks

According to the report, some countries want to stay ahead of the game and review the standards before they are implemented, such as the United States. Other countries prefer to implement current standards and revise them later.

The EU Markets in the Regulation of Crypto-Assets framework already allows stablecoins to attract the same capital treatment as their support, typically cash and cash equivalents.

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