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Hassan Shittu
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Hassan Shittu
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Global banking regulators are preparing to revise rules on how banks treat crypto assets, particularly stablecoins, as pressure grows from major economies and industry groups to revise strict capital requirements set to come into effect next year.
The Basel Committee on Banking Supervision (BCBS), the world’s highest banking standard, is in discussions about possible amendments to its 2022 framework, which imposes some of the toughest capital rules ever proposed for crypto holdings.
The standards, designed after years of volatility in digital markets, necessary banks to assign a risk weight of 1,250% to unbacked crypto assets such as Bitcoin, meaning they must hold a capital equal to the total value of their cryptographic exposure.
Those measures, aimed at protecting banks from potential losses, effectively discourage most institutions from offering crypto-related services.
But the rapid rise of stablecoins and a broader shift in the way regulators and governments view digital assets have sparked a renewed debate.
Are The Basel Rules To Evolve With The Crypto Market?
Second to Bloomberg’s report, the United States is leading calls for revisions, arguing that the original standards are now outdated and inconsistent with the current structure of the crypto market.
Stablecoins, digital tokens tied to assets such as the US dollar, have grown rapidly, with new regulatory frameworks such as the US GENIUS Act encouraging its use for payments.
Yet under current Basel rules, permissionless stablecoins like Tether (USDT) and Circle’s USDC, which operate on open blockchain networks, face the same heavy capital charges as highly volatile cryptocurrencies like Bitcoin.
Senior financial executives said this approach left banks on the sidelines, unable to serve the growing institutional demand for digital asset services.
A recent report from The Banker revealed that the high-risk classification made it ‘economically unviable’ for banks to keep crypto on their balance sheets, forcing business activity towards unregulated platforms.
The BCBS framework, first finalized at the end of 2022 and updated in 2024, divides crypto assets into two main groups: Group 1, which includes traditional tokenized assets and stablecoins with reliable support mechanisms, and Group 2, which covers all other crypto assets subject to punitive capital treatment.
The global implementation of these standards has been delayed by one year to January 2026.
Global Regulators Diverge on Basel Crypto Standards as Implementation Approaches
While the Basel Committee’s guidelines are not binding, its 45 members, including regulators from 28 jurisdictions, typically adopt them across the country.
However, not all major regions are on the same timeline. The European Central Bank supports it implementation pre-existing rules, while the United States, the United Kingdom, and several Asian jurisdictions are seeking revisions before the standards take effect.
Singapore recently sent back its rollout by a year to ensure global alignment, and Hong Kong plans to follow in 2026 with lighter requirements for licensed stablecoins.
In the European Union, the standards of Basel are being incorporated through the Capital Requirements Regulation (CRR 3) and the Markets in the framework of Crypto-Assets (MiCA)..
Draft rules from the European Banking Authority (EBA) published in August describes the detailed methods for the calculation of cryptographic exposure in credit, market and liquidity risks.
Unclaimed crypto assets maintain a risk weight of 1,250%, while stablecoins backed by traditional assets can receive a lower load of 250%.
The EBA’s approach aligns with the Basel principles but introduces transitional rules, allowing banks limited engagement with digital assets while more permanent frameworks are developed.
The EU is also preparing for the launch of a stablecoin backed by the euro in 2026led by a consortium of nine European banks, including ING and UniCredit, under the supervision of MiCA.
The UK is taking a similarly cautious approach. The Bank of England has confirmed that the upcoming rules are likely to be “restrictive”. encourage banks to maintain low crypto exposure.
The Prudential Regulation Authority is development a new prudential regime, CRYPTOPRU, which should be finalized in 2026.
The GENIUS Act Sparks Political Clash over the Treatment of Stablecoins in the Banking Sector
Meanwhile, US regulators are reevaluating their prudential treatment of stablecoins the passage of the GENIUS Act earlier this year.
The law provides a framework for stablecoin issuance and payments, but leaves open questions about how banking rules will adapt.
The Federal Reserve, the OCC, and the FDIC are coordinating how to implement Basel standards while addressing domestic regulatory overlaps.
Industry groups have intensified the pressure on the Basel Committee to ease the capital burden. In August, associations including the Global Financial Markets Association and the Institute of International Finance urged regulators to remove what they call “cliff effect” penalties.
Their joint letter argued that treating tokenized US Treasury securities as high risk simply because they exist on public blockchains contradicts technology-neutral policy principles.
The debate comes amid wider concerns about how stablecoins could redefine global finance.
A recent report from Standard Chartered warned that more than $1 trillion could flow from emerging market banks and into stablecoins by 2028as users in developing economies turn to digital assets pegged to the dollar as a safer store of value.
