Basel Committee urged to pause crypto standard roll out: Here’s why

A group of trade associations have requested the Basel Committee of Banking Supervision (BCBS) to hold the implementation of its crypto standards guidelines in January 2026. The Global Financial Markets Association and the Institute of International Finance are among the eight groups that sent a collective letter to the Switzerland-based body responsible for the formulation of global banking standards.

The letter essentially outlines concerns that BCBS’ crypto rules created last year, must be revised given that the regulatory situation around crypto has changed significantly over the last few months. The trade bodies are concerned that these rules could restrict banks from engaging with crypto activities.

“A new, revised standard, with a different implementation date, would also help ensure that all members of the BCBS are able to implement the standard in a full, timely and consistent manner that further preserves financial stability while promoting responsible innovation for global markets,” the letter suggested.

Up until fairly recently, banks around the world had maintained a distance from participating in crypto activities. However, with the EU having implemented its MiCA regulations to oversee the digital assets sector and the evolving legislative landscape around crypto in the U.S., the sentiments of traditional banks towards exploring the sector have also underwent a major overhaul.

The letter pointed out that payment companies and asset managers are among financial players that have now joined banks in jumping onto the crypto wagon with an array of experimental services. The trend, as per the letter, indicates at a future where a mix of banks and non-banking fintech firms could all operate in the crypto space.

The trade bodies have expressed concerns that if the Basel Committee’s strict rules go into effect, it could drive more crypto activity to less-regulated firms. This could subsequently create unintended risks and make market oversight more challenging, the letter alerted.

Banks should be encouraged to explore the crypto sector to improve market stability is a key argument presented in the letter advocating a pause in the implementation of the proposed crypto guidelines.

The trade organizations have advised the Basel Committee to eliminate blanket distinctions between permissioned and permissionless ledgers and bring focus to the legal and settlement attributes of crypto assets. The letter further suggests that stablecoins should be recognized as eligible collaterals.

Citing that the market is maturing with more institutional involvement and improved liquidity, the letter has urged the BCBS to reconsider strict capital requirements for high-risk crypto assets.

“We would value an opportunity to meet to discuss this request in greater detail and remain at your disposal to provide any additional information you may require,” the letter signed by the leaders of these trade bodies noted.

A response from the BCBS on this letter remains awaited for now.