Global banking regulators are considering changes to rules on handling crypto assets, especially stablecoins, due to pressure from major economies. The Basel Committee on Banking Supervision is discussing amendments to strict capital requirements set for 2022, which included a 1,250% risk weight for unbacked crypto assets like Bitcoin, discouraging most banks from offering crypto services.

The rise of stablecoins and shifting views on digital assets have reignited debate. The U.S. is leading calls for revisions, arguing that the standards are outdated. Stablecoins like Tether and USDC face heavy capital charges under current rules, hindering banks from meeting institutional demand for digital asset services.

The Basel Committee’s framework divides crypto assets into two groups, with implementation delayed to 2026. The EU and U.S. have differing timelines for adopting the rules, with Singapore and Hong Kong adjusting their approaches. The EU is integrating Basel standards through the Capital Requirements Regulation and the Markets in Crypto-Assets framework.

The European Banking Authority’s draft rules outline methods for calculating crypto exposure, with unbacked assets facing a 1,250% risk weight. The EU is preparing for a euro-backed stablecoin launch in 2026. The UK is expected to have restrictive rules, and the U.S. is reevaluating treatment of stablecoins following the GENIUS Act.

Industry groups are pressuring the Basel Committee to ease capital requirements, arguing against penalizing tokenized U.S. Treasury securities. Concerns over stablecoins reshaping global finance have been raised, with a report warning of significant capital outflows from emerging-market banks into stablecoins by 2028.

Source: ECB

Original story by Hassan Shittu at Cryptonews.com.

Read more at Yahoo Finance: Crypto Banking Rules Face Overhaul as Global Regulators Sound the Alarm on Stablecoins