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Hassan Shittu
Journalist
Hassan Shittu
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Global banking regulators are preparing to overhaul the rules on how banks deal with crypto assets, particularly stablecoins, as major economies and industry groups step up pressure to revise strict capital requirements that come into effect next year.
The Basel Committee on Banking Supervision (BCBS), the world’s leading banking standard-setter, is discussing possible changes to its 2022 framework, which has introduced some of the strictest capital rules ever proposed for cryptocurrency holdings.
Standards designed after years of volatility in digital markets, required banks to assign a 1,250% risk weight to uncovered crypto assets like bitcoin, meaning they must hold capital equal to the full value of their crypto exposure.
These measures, intended to protect banks from potential losses, have effectively discouraged most institutions from offering cryptocurrency-related services.
However, the rapid rise of stablecoins and a broader shift in how regulators and governments view digital assets have sparked renewed debate.
Will the Basel Rules evolve with the crypto market?
According to According to a Bloomberg report, the United States is leading calls for revisions, arguing that the original standards are now outdated and inconsistent with the current structure of the crypto market.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 pegged to assets such as the US dollar, have grown rapidly thanks to new regulatory frameworks such as US GENIUS Act encourage their use for payments.
However, under current Basel rules, permissionless stablecoins like Circle’s Tether (USDT) and USDC, which run on open blockchain networks, face the same high capital charges as highly volatile cryptocurrencies like Bitcoin.
Senior financial executives said this approach left banks on the sidelines, unable to meet growing institutional demand for digital asset services.
A recent report by The Banker revealed that the high risk classification made it “economically unviable” for banks to hold cryptocurrencies on their balance sheets, forcing trading activities towards unregulated platforms.
BCBS framework, first completed in late 2022 a updated in 2024, divides cryptoassets into two main groups: Group 1, which includes tokenized traditional assets and stablecoins with reliable support mechanisms, and Group 2, which includes all other cryptoassets subject to punitive capital treatment.
The global implementation of these standards has been delayed by one year to January 2026.
Global regulators diverge from Basel crypto standards as rollout approaches
While the Basel Committee’s guidelines are non-binding, its 45 members, including regulators from 28 jurisdictions, typically adopt them at the national level.
However, not all major regions are on the same timeline. The European Central Bank supports implementation existing rules first, while the US, UK and several Asian jurisdictions are seeking revisions before the standards come into force.
Singapore recently postponed its rollout within a year to ensure global alignment, and Hong Kong plans to follow in 2026 with more relaxed requirements for licensed stablecoins.
Basel standards apply in the European Union incorporated through the Capital Requirements Regulation (CRR 3) a The Markets in Crypto-Assets (MiCA) framework..
Draft rules from the European Banking Authority (EBA) published in August outline detailed methods to calculate cryptocurrency exposure across credit, market and liquidity risks.
Unsecured crypto-assets will retain a risk weight of 1,250%, while stablecoins backed by traditional assets can receive a lower fee of 250%.
The EBA’s approach is consistent with the Basel principles, but introduces transitional rules to allow banks limited involvement in digital assets while more permanent frameworks are developed.
The EU is also preparing for this the launch of a euro-backed stablecoin in 2026led by a consortium of nine European banks, including ING and UniCredit, under the supervision of MiCA.
The United Kingdom follows a similarly cautious path. The Bank of England has confirmed that the upcoming rules are likely to fall on the “restrictive end”. encouraging banks to keep their exposure to cryptocurrencies low.
The Prudential Regulation Authority is developing new CRYPTOPRU prudential regime expected to be completed in 2026.
The GENIUS Act will fuel political clashes over the handling of stablecoins in the banking sector
US regulators, meanwhile, are reassessing their cautious treatment of stablecoins passage of the GENIUS Act earlier this year.
The law provides a framework for stablecoin issuance and payments, but leaves open questions as to how banking rules will adapt.
The Federal Reserve, the OCC, and the FDIC are coordinating how to implement the Basel standards while addressing overlapping national regulations.
Industry groups have stepped up 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 waive what they called the “cliff-effect” sanctions.
Their joint letter argued that treating the U.S. Treasury’s tokenized securities as high-risk simply because they exist on public blockchains runs counter to technology-neutral policy principles.
The debate comes amid broader concerns about how stablecoins could reshape global finance.
A recent report by Standard Chartered warned that over $1 trillion could flow from emerging market banks to stablecoins by 2028as users in emerging economies turn to dollar-pegged digital assets as safer stores of value.
