Global banks may soon take a more favorable view of cryptocurrencies as the Basel Committee on Banking Supervision (BCBS) prepares to revise its landmark guidance on crypto exposure, according to a Bloomberg report published Friday.
According to Bloomberg, citing sources familiar with the matter, the Basel Committee’s 2022 guidance on banks’ treatment of crypto will be updated next year to be more favorable. This follows the issuance 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 talks about the appropriateness of the previous rules, which the United States, United Kingdom and the European Union have yet to fully implement.
The need for new rules arises from the rapid growth of stablecoins, which were recently regulated in the US through the GENIUS Act and are now permitted for use in payments.
Under the existing Basel rules, stablecoins issued on public blockchains are subject to the same capital charges as riskier assets, such as Bitcoin (BTC) or Ether (ETH). That equivalence has drawn criticism from market participants who argue that regulated, asset-backed stablecoins pose far lower risks.
A powerful standard-setting body
The Basel Committee is a global body that sets international standards for bank regulation, focusing on capital adequacy, risk management and supervision. Its rules, such as Basel III, ensure that banks worldwide remain stable and resilient, presumably reducing the risk of global financial crises.
Related: Basel Committee suggests introducing maturity limits for stablecoin reserve assets
The comments follow Chris Perkins, president of investment company CoinFund, saying in mid-August that capital requirements for banks set by the Basel Committee create a “chokepoint” designed to throttle the growth of the crypto industry. He said at the time:
“It’s a very nuanced way of suppressing activity by making it so expensive for the bank to do activities that they’re just like, ‘I can’t.’”
Related: Basel Committee finalizes crypto exposure rules for banks
According to the report, some countries want to stay ahead of the game and review the standards before they are implemented, such as the US. Other countries prefer implementing the current standards and reviewing them later.
The EU’s Markets in Crypto-Assets Regulation framework already allows stablecoins to attract the same capital treatment as their backing, typically cash and cash equivalents.
Magazine: GENIUS Act reopens the door for a Meta stablecoin, but will it work?
