Finance Industry Groups Urge Revisions to Basel Committee Crypto Rules for Banks
August 20, 2025—A coalition of prominent finance industry organizations has called on the Basel Committee on Banking Supervision to reconsider recently established regulatory standards governing banks’ engagement with cryptocurrencies. The groups argue that the standards, agreed upon in 2022, risk sidelining banks from meaningful participation in the rapidly evolving crypto market.
Background on Basel Committee Standards
The Basel Committee, a global regulatory forum including central banks and financial regulators from major economies, developed a framework last year to guide how banks should assess, manage, and disclose risks related to crypto asset exposures. These rules aimed to bolster financial stability by imposing conservative capital requirements and strict supervisory controls on banks’ crypto activities.
Industry Concerns Over Conservative Approach
In an open letter sent to the Basel Committee, leading financial associations—such as the Global Financial Markets Association, the Institute of International Finance, and the International Swaps and Derivatives Association—as well as representatives from the crypto sector, expressed concerns that the standards have not kept pace with recent developments. The letter highlighted that the crypto market has experienced substantial growth and increased integration with traditional financial systems since 2022, making the current rules disproportionately restrictive.
According to the letter, the "Cryptoasset Standard’s restrictive qualification standards, combined with punitive market and credit risk capital treatments," effectively render it economically unviable for banks to engage meaningfully in crypto markets. The industry groups requested the Basel Committee to “temporarily pause” implementation of the standards—all set to take effect in January 2026—to gather updated information and revisit the framework with an eye toward more balanced regulation.
Changing Regulatory Landscape and Market Growth
While crypto assets remain a relatively small segment of the global financial system, their rapid expansion and increasing mainstream acceptance have attracted significant attention from banks eager to capitalize on emerging opportunities. The shift is particularly notable in the United States, where the regulatory environment has softened under President Donald Trump, who has adopted a pro-crypto stance. U.S. regulators have recently eased rules, enabling banks to offer a broader range of crypto-related services.
This evolving regulatory backdrop contrasts sharply with the Basel Committee’s cautious approach, reflecting lingering concerns rooted in the fallout from major crypto firm collapses in 2022. Such failures caused significant investor losses and revealed misconduct within the crypto industry, fueling ongoing demands for stringent oversight.
Role and Influence of the Basel Committee
Although the Basel Committee lacks direct enforcement power, its member jurisdictions generally commit to applying its standards to internationally active banks. As these crypto rules are scheduled for implementation early next year, industry stakeholders are urging a reevaluation to ensure that regulatory measures strike the right balance between safeguarding financial stability and fostering innovation.
A representative of the Bank for International Settlements, where the Basel Committee is hosted, did not immediately respond to a request for comment on the industry’s plea.
As the dialogue continues, the outcome will likely shape how banks navigate crypto markets amid evolving risks and opportunities, with implications for the broader integration of digital assets within the global financial ecosystem.
Reporting by Elizabeth Howcroft; Editing by David Goodman.