US and UK revolt forces Basel to rethink brutal crypto capital rules for banks
Overview
The Basel Committee is reconsidering its stringent capital requirements for banks dealing with cryptocurrencies. This change is prompted by differing regulatory approaches in the US, UK, and EU, alongside the increasing adoption of stablecoins.
Review of Capital Rules
The Basel Committee, known for its role in setting international banking regulations, is currently reviewing its harsh capital requirements for cryptocurrencies. The proposed rules previously included a staggering capital charge of 1,250%. The chair of the Basel Committee acknowledged the need for this reassessment, particularly in light of the growing use of stablecoins and the varied regulatory responses from key financial jurisdictions like the US, UK, and EU.
Importance of the Review
This reconsideration is significant as it reflects the evolving landscape of cryptocurrency regulation and the impact of stablecoin adoption on traditional banking practices. The divergence in regulatory approaches among major economies highlights the complexity of establishing a unified framework for digital assets.
Impact on the crypto market
- Potential easing of capital requirements could encourage banks to engage more with cryptocurrencies.
- A more favorable regulatory environment may boost institutional investment in digital assets.
- Divergent regulations could lead to increased innovation and competition in the crypto space.
- The review signals a recognition of the importance of stablecoins in the financial ecosystem.
- Ongoing discussions may influence global standards for cryptocurrency regulation moving forward.
Updated: 11/19/2025, 11:20:53 AM
