Rapid Stablecoin Growth Prompts Basel Regulators to Reconsider Tough Crypto Rules
The Basel Committee on Banking Supervision is facing increasing pressure to revisit its capital requirements for crypto assets as stablecoins continue to grow rapidly in global markets. Many U.S. banks and regulators argue that the current framework unfairly groups stablecoins—generally viewed as lower-risk—with highly volatile cryptocurrencies, creating a barrier to healthy institutional participation.
Under the existing Basel rules, banks must apply a very high risk weight of 1,250% to crypto assets held on permissionless blockchains. This forces institutions to hold large amounts of capital, making it expensive and impractical for banks to offer crypto-related services or maintain digital asset exposure.
Erik Thedéen, the chair of the Basel Committee and governor of Sweden’s central bank, acknowledged that the fast-paced rise of stablecoins requires a fresh regulatory perspective. However, he noted that reaching global consensus on updated standards will be difficult due to differing national positions and regulatory philosophies.
The push for reform is gaining momentum as both the United States and the United Kingdom have opted not to adopt the most punitive elements of Basel’s crypto capital rules. Banks and industry stakeholders argue that the existing approach limits innovation and slows the development of compliant digital-asset services within traditional financial systems.
With stablecoins playing a larger role in modern finance, the Basel Committee is increasingly expected to reconsider its 2022 crypto-asset standards—potentially paving the way for a more balanced and practical regulatory approach that reflects the evolving nature of digital currencies.
USDT and USDC Face Basel’s Strictest Risk Category
The Basel Committee’s current rules assign a 1,250% risk weight to bank holdings of unbacked crypto assets like Bitcoin and Ethereum, placing them in the highest-risk category under global banking regulations.
These standards, finalized three years ago, are set to be implemented on January 1.
According to the framework, banks would need to hold $1.25 in capital for every $1 of crypto on their books, making direct exposure to digital assets financially unrealistic for most institutions.
As a result, banks have largely refrained from holding these assets or issuing loans against them, leaving cryptocurrencies mostly absent from traditional balance sheets.
What was originally designed as a strict safety measure is now being reconsidered, particularly as stablecoins gain wider adoption and major economies begin taking different regulatory approaches.
Source: Cryptonews Edited by Sonarx