Basel Committee Chair Signals Re-Think of Bank Crypto Rules Amid Diverging Global Stance
In a candid assessment, the chair of the Basel Committee on Banking Supervision, Erik Thedéen, has acknowledged that the global rules governing banks’ exposure to crypto-assets must be revisited. Speaking to the Financial Times, Thedéen noted that the current framework—particularly the extreme risk-weighting of 1,250 percent for banks holding certain crypto-assets—was designed when the market was far less mature. Now, with stablecoins and other tokenised assets growing rapidly, he says the committee must adopt “a diverse approach” to remain relevant. The admission comes as key jurisdictions such as the United States and the United Kingdom decline to adopt the Basel standard in its existing form, highlighting widening cracks in regulatory alignment.
Thedéen emphasised that while the committee shares broad objectives, diverging national perspectives make consensus increasingly hard. The rules under review were originally drafted several years ago and were scheduled to take effect on January 1, 2026. Under the existing standard, crypto-assets operating on permissionless blockchains—including many stablecoins—would receive the highest risk classification, a level typically reserved for the riskiest banking exposures. Critics argue this approach makes meaningful bank participation economically unviable and fails to reflect evolving use cases across decentralised finance and global payment systems.
Key issues ahead: stablecoins, permissionless chains and implementation gaps
A core issue in the review is the treatment of stablecoins and tokenised assets issued on permissionless chains. Thedéen noted that the committee’s initial framework was constructed with BTC-like instruments in mind, but market composition has evolved substantially. With stablecoins now approaching $300 billion in circulation and increasingly integrated into institutional payment mechanics, regulators are being pushed to reassess whether permissionless systems inherently pose systemic risk.
The implementation challenge is equally significant. The United States and the United Kingdom have stated they will not apply the rules as designed, leaving global standards fragmented and undermining the Basel Committee’s ability to enforce uniform oversight. This rift complicates capital planning for multinational banks and could push activity toward jurisdictions with lighter requirements.
Implications for banks and market structure
If Basel revises its rules to reduce capital burdens and recalibrate risk models, banks may participate more directly in digital-asset custody, settlement, and tokenisation initiatives. Lower capital charges would make it easier for major institutions to support stablecoin issuance, trade tokenised assets, and integrate blockchain-based systems into regulated financial infrastructure. Such shifts could accelerate institutional adoption and bring crypto markets closer to traditional finance.
Alternatively, if revisions stall or fail to satisfy major jurisdictions, regulatory fragmentation may deepen. Banks in stricter regions may be forced to remain on the sidelines while non-bank entities, fintech firms and offshore venues continue expanding their share of the crypto economy. This imbalance could increase systemic vulnerabilities and fragileen oversight where it is most needed.
In summary, Thedéen’s remarks signal an inflection point for global crypto regulation. By acknowledging that legacy assumptions may no longer reflect market realities, the Basel Committee has opened the door to reform. Whether this results in coordinated global standards or widening divergence will determine how effectively banks can participate in the digital-asset ecosystem over the coming decade.
