Basel Committee to Revise Crypto Capital Rules After US, UK Pushback

Highlights:

• The US and UK are opposing Basel’s strict crypto capital rules, urging changes.
• The rise of stablecoins is pressuring regulators to adjust crypto rules.
• Diverging global regulations could create competitive imbalances for banks.

The Basel Committee on Banking Supervision (BCBS) is reconsidering its strict crypto capital requirements following significant backlash by the United States and the United Kingdom. These rules involve banks imposing a risk weighting of 1,250% on crypto assets, including stablecoins, on banks. The move comes after concerns that the existing rules do not consider the rapid rise of stablecoins. Stablecoins have become part of the global cryptocurrency market.

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Erik Thedéen, the chair of the Basel Committee, in an interview with the Financial Times, said that a different approach to crypto capital rules is needed. Thedéen, who is also the governor of the Central Bank of Sweden, emphasized the difficulties of the fast growth of stablecoins.

Stablecoins, including Tether (USDT) and Circle (USDC), are now an essential part of the digital currency trading and are pegged to real-world assets, such as the US dollar. The stablecoin market is currently estimated at around $300 billion. Regulators are therefore under pressure to adapt to the changing environment.

WOW Basel Committee to rework 1,250% crypto capital rule after US and UK regulators refuse to implement it.

This will bring MANY more banks onchain

😳

The Global Basel Committee has officially announced it is overhauling its crypto capital standards, signaling a massive shift… pic.twitter.com/0z1tUhHw7u

— Simon Taylor (@sytaylor) November 19, 2025

The Strain of Current Crypto Capital Rules

The Basel Committee last year amended that any crypto assets developed on permissionless blockchains, or decentralized ones, fall under the strictest capital requirements. This also covers popular stablecoins, and they should be treated the same way as the riskiest investments, such as venture capital. Consequently, banks must keep holding capital equal to the worth of the crypto assets they hold.

These rules were initially created considering cryptocurrencies such as Bitcoin. However, the surge of stablecoins has pushed regulators to change their strategy. Initially, the Basel framework was aimed at the extreme volatility of such assets as Bitcoin. Thedéen noted that stablecoins are risky. However, they might not have to undergo so much scrutiny as speculative digital assets.

Pushback from Major Economies

The resistance from the US and UK has had a major influence on the position of the Basel Committee with regard to the crypto capital rules. For instance, the US Federal Reserve noted last month that it will not apply the Basel framework in its current form. Michelle Bowman cited demands as being unrealistic. The UK also does not intend to apply the rules in full. Rather, it is concentrating on developing its own regulatory framework for digital assets.

This divergence in regional approaches to crypto regulations raises the question of global consistency. The European Union has partially adopted Basel’s crypto capital rules but has omitted some provisions related to permissionless ledgers. This split has the potential to create a different set of rules for banks that operate in multiple jurisdictions.

The Need for a Revised Approach

The increased relevance of stablecoins in the global financial environment is compelling regulators to revise their position. The Basel Committee, according to Thedéen, must act swiftly to respond to the change in the crypto market. With the growing adoption of regulated stablecoins, many argue that the risk weight of these assets should be reassessed according to their evolving nature.

Thedeen also noted that it could be challenging to agree with global regulators. This is because there are differences in the perception of risk profiles of digital assets. However, he pointed out that it is essential to find areas of agreement to provide consistency in global financial regulations.

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