Basel Rethinks Crypto Rules as Stablecoins Grow

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Global regulators are reviewing how banks should treat crypto assets as the rapid rise of stablecoins pressures the current rulebook. The Basel Committee has reopened parts of its guidance after several major jurisdictions pushed back against requirements set a few years ago. Under the existing framework, some volatile crypto assets carry a 1,250 per cent risk weight, a level the United States and the United Kingdom have chosen not to apply in full. Officials say the review aims to address gaps created as the market expanded far faster than the original rules anticipated.

Early Signs People Watch During Policy Debates

Traders continue to track short-term signals while the regulatory review moves into another month. One of the tools on their screens is a coinbase new listings alert, which lists assets scheduled to go live and often draws attention before trading opens. Activity around several recent listings picked up hours ahead of launch, and that pattern has kept the alert in regular use. Wallet-flow monitors and simple on-chain feeds stay active as well, giving traders quick reads on whether movement is building or flat. Liquidity data from charting platforms is checked throughout the day. None of these indicators settles the regulatory debate, but they remain part of routine monitoring during the review.

Why Stablecoins Are Placing Pressure on Old Rules

The stablecoin market now sits near the three hundred billion dollar mark, and that scale has pushed the review higher on the agenda. Their rapid growth has pushed regulators to reassess rules built around older types of digital assets. The original rulebook was shaped around tokens running on permissionless chains, which left less room for the different structures used by many stablecoins. The Bank of England has put forward plans allowing stablecoin issuers to invest up to 60% of their reserves in short-term government debt, while still capping individual holdings at £20,000 and business holdings at £10 million. The consultation on the proposal runs until 10 February 2026, signalling that even jurisdictions keen to relax rules are opting for staged changes rather than immediate overhaul. 

What Changing Rules Could Mean for Banks

Banks have worked under strict capital rules that force them to hold sizeable buffers for many crypto assets, which pushed up the cost of offering even simple services. These rules made it difficult to offer basic services without taking on heavy costs. A possible update could create more space for banks to handle certain tokens with lower capital demands. If that happens, more banks may feel comfortable offering custody, payment support, or settlement tools tied to digital assets. For instance, recent OCC guidance allows U.S. banks to hold crypto for the specific purpose of settling blockchain network fees. 

How This Shapes Confidence Across the Market

Policy debates often move more slowly than the market, but they still shape sentiment around digital assets. Traders look for signs of rising interest while institutions wait for clearer rules. A UK fintech panel recently warned regulators they have “maybe three months” to act, noting the UK trails Singapore and Abu Dhabi in digital asset policy progress. The Basel Committee’s review continues in the background as the market moves ahead.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.