The idea of creating a single global standard for banks holding crypto is beginning to fracture.
Key Takeaways:
Basel’s upcoming crypto capital rules are facing resistance from major regulators, especially over the treatment of stablecoins.
The U.S. Federal Reserve and Bank of England say they will not implement the framework in its current form.
Banks argue the rules make crypto participation economically unrealistic and are lobbying for revisions.
The Financial Times reports that the Basel Committee on Banking Supervision is now under pressure to rethink its upcoming crypto capital rules after major regulators signaled they won’t adopt them.
The Flashpoint: Stablecoins, Not Bitcoin
The Basel proposal was written at a time when Bitcoin and Ethereum volatility dominated risk discussions. Three years later, the landscape has shifted – and stablecoins have become the real dividing line. While Basel still places them under the same broad crypto umbrella, the United States and the United Kingdom have no plans to enforce the framework in its current design, arguing that stablecoins don’t behave like speculative tokens.
The disagreement has become significant enough that Basel Chairman Erik Thedéen is now calling for a reassessment, publicly admitting that the current model no longer reflects how regulators or banks view digital assets.
Banks Say Rules Make Crypto Participation Impossible
The push for revision is also coming from inside the financial system. Large institutions have warned that the upcoming requirements – set to take effect on January 1, 2026 – essentially shut banks out of the crypto market by design.
Under the Basel formula, volatile assets including BTC carry a 1,250% risk weight, forcing banks to hold $1 of capital for every $1 worth of crypto. Banks argue this does not protect them – it simply makes participation economically pointless.
Global Consensus Breaks Down
Perhaps the most disruptive development is that the world’s most influential monetary authorities are refusing to enforce the rules.
The U.S. Federal Reserve has no intention of implementing them, with Vice Chair Michelle Bowman calling the framework “very unrealistic.”
The Bank of England has adopted a similar stance, signalling that it does not plan to enforce the rules as written.
With the U.S. and U.K. opting out, the Basel model – designed as a universal standard – risks losing its status before it even launches.
What That Means for Crypto Regulation Worldwide
For years, the Basel Committee has shaped risk guidelines that most major economies follow. The crypto debate is the first major instance where regulators are openly rejecting the blueprint rather than aligning with it.
Thedéen recognizes that rewriting the rulebook will be extremely difficult – not because regulators disagree on whether crypto needs oversight, but because they no longer agree on what type of oversight different crypto assets deserve.
The fight ahead is no longer about whether crypto belongs inside the banking system. It’s about how to regulate it without treating Bitcoin, Ethereum, and stablecoins as if they pose the same risks.
