A group of international financial organizations is requesting a temporary suspension and possible adjustment of the Basel Committee on Banking Supervision (BCBS)’s proposed regulations for crypto assets. The coalition believes these rules, scheduled to be enacted in January 2026, may impede banks from actively participating in the expanding digital currency landscape.
The core of the concern revolves around the proposed 1250% risk weighting applied to cryptocurrencies. This would necessitate banks to allocate substantial capital reserves for every dollar invested in crypto, rendering any significant involvement in the sector economically unviable for most institutions.
In a public statement addressed to the BCBS, these organizations are pushing for a moratorium on implementation. They contend that the crypto market has undergone significant transformation since 2022, rendering the present regulatory framework excessively cautious and detached from actual risk assessments.
The letter bears the signatures of influential industry groups, including the Global Financial Markets Association (GFMA), the Institute of International Finance (IIF), and the International Swaps and Derivatives Association (ISDA), among others. These entities represent a wide array of financial sector participants, spanning institutional investors, derivatives market professionals, and capital market operators. They argue that the capital treatment of crypto assets, as dictated by the proposed Basel rules, fails to accurately reflect the true risks or potential advantages presented by the underlying technology, especially considering advancements in areas like tokenization, stablecoins, and distributed ledger technology (DLT).
Moreover, the associations emphasize the increasing integration of DLT in processes such as securities issuance, collateral management, and fund administration, which they assert is fundamentally reshaping conventional financial systems.
Simultaneously, banking institutions are actively seeking greater regulatory certainty in the United States, where a more favorable stance towards crypto under President Donald Trump has spurred the passage of supportive legislation. This includes the GENIUS Act, designed for stablecoins, and a relaxation of regulatory burdens for banks engaging in crypto-related activities. The financial groups argue that the current Basel framework not only restricts participation but also threatens to divert innovation and capital away from regulated channels, potentially undermining financial stability. In their shared letter, the signatories advocate for a more technology-neutral regulatory strategy that prioritizes the nature of financial activities and their inherent risks, rather than the specific technology employed.
The Basel Committee, which includes regulators and central bankers from key global financial hubs, lacks direct enforcement capabilities. Nevertheless, it wields considerable influence over global banking standards. Its 2022 agreement was largely influenced by the climate of market turbulence and prominent failures that plagued the crypto industry at the time. However, financial organizations maintain that the crypto market has since matured, and the proposed standards fail to recognize the sector’s increasing integration with mainstream financial markets. Furthermore, they emphasize recent market developments, such as a surge in institutional investment in stablecoins and tokenized assets, as clear indicators that the regulatory environment necessitates careful reconsideration.
The call for a pause has garnered attention from central banks and regulators. U.S. Federal Reserve Vice Chair for Supervision Michelle Bowman has publicly acknowledged that the Basel Committee will continue to examine the matter. However, she refrained from specifying whether the U.S. will fully implement the proposed standards in their current form. The Bank for International Settlements (BIS), which hosts the BCBS, has yet to issue an official response. The outcome of these deliberations could significantly shape the future of crypto banking, especially as financial institutions increasingly view digital assets as integral to their long-term business strategies.
Source:
[1] Finance Industry Seeks Global Crypto Rule Overhaul for Banks (https://finance.yahoo.com/news/finance-industry-seeks-global-crypto-162858018.html)
[2] IIF, GFMA, trade bodies urge Basel Committee to revisit … (https://www.ledgerinsights.com/iif-gfma-trade-bodies-urge-basel-committee-to-revisit-crypto-rules-again/)
[3] Finance industry bodies call for changes to crypto rules for … (https://www.reuters.com/legal/government/finance-industry-bodies-call-changes-crypto-rules-banks-2025-08-19/)
[4] Joint Trades Call for Recalibration of Cryptoasset … (https://bpi.com/joint-trades-call-for-recalibration-of-cryptoasset-prudential-standards-and-highlight-dlts-transformative-role-in-capital-markets/)