Regulatory Rupture: US-UK Defiance Forces Basel to Redraft Crypto Bank Capital Framework

A fundamental schism in global financial regulation is forcing the Basel Committee to recalibrate its approach to cryptocurrency.

The committee’s most drastic measure—a 1,250% risk weighting for bank crypto exposures—is set for a formal review after US and UK authorities declined to implement it, challenging the BCBS’s role as the standard-setter for banking supervision.

In a significant admission, BCBS Chair Erik Thedéen stated a “different approach” is necessary. The current rule groups diverse assets like Bitcoin and regulated stablecoins (USDT, USDC) under the same prohibitive category, demanding capital equal to 100% of exposure.

Thedéen identified the maturation of the market, specifically the “dramatic” rise of stablecoins, as the catalyst for change. The committee now faces pressure to conduct a rapid risk analysis and develop a more differentiated model that could lower the capital burden for certain digital assets, thereby reintegrating the dissenting nations and adapting to a transformed financial ecosystem.