Capital requirements set by the Basel Committee on Banking Supervision create a “chokepoint” for banks that aims to limit the growth of the crypto industry, according to CoinFund’s Chris Perkins. The rules lower a bank’s return on equity by increasing reserve requirements for holding crypto, making it too costly for banks to trade.

The Bank for International Settlements (BIS) released reports claiming that crypto could destabilize the financial system and exacerbate wealth gaps. They urge stricter regulation in response. Another report by the BIS states that stablecoins fail as money and could pose systemic risks in the financial system due to their increasing market capitalization and connections to traditional finance.

Read more at Cointelegraph: Current Banking Reserve Requirements Holding Crypto Industry Back