Global banks may soon take a more favorable view of cryptocurrencies as the Basel Committee on Banking Supervision (BCBS) prepares to revise its historical guidance on exposure to cryptocurrencies, according to a Bloomberg report released Friday.
According to Bloomberg, citing sources familiar with the matter, the Basel Committee’s 2022 guidance on the treatment of banks in crypto will be updated next year to be more favorable. This follows the release of previous standards in 2022, with most banks interpreting them as a signal to avoid crypto altogether.
Bloomberg’s sources said the Basel Committee recently held discussions on the merits of the previous rules, which the United States, the United Kingdom and the European Union have not yet fully implemented.
The need for new rules stems from the rapid growth of stablecoins, which were recently regulated in the United States through the GENIUS Act and are now permitted for use in payments.
Under current Basel rules, stablecoins issued on public blockchains are subject to the same capital requirements as riskier assets, such as Bitcoin (BTC) or Ether (ETH). This equivalence has drawn criticism from market participants who say that regulated, asset-backed stablecoins pose much lower risks.
A powerful standards body
The Basel Committee is a global body that sets international standards for banking regulation, focusing on capital adequacy, risk management and supervision. Its rules, such as Basel III, ensure that banks around the world remain stable and resilient, presumably reducing the risk of a global financial crisis.
The comments follow Chris Perkins, president of investment firm CoinFund, who said in mid-August that capital requirements for banks set by the Basel Committee created a “choke point” intended to curb the growth of the crypto industry. He said at the time:
“It’s a very nuanced way of suppressing activity by making the activity so costly to the bank that they just say, ‘I can’t.’
According to the report, some countries want to stay ahead of the curve and review standards before implementation, such as the United States. Other countries prefer to implement current standards and revise them later.
The EU’s regulatory framework for crypto-asset markets already allows stablecoins to benefit from the same capital treatment as their carrier, typically cash and cash equivalents.
