DeutschThe tone among international regulators is shifting. What just a few years ago seemed like a bulwark against the crypto industry is now crumbling in crucial areas. Ironically, the very committee that sought to keep banks away from trading digital assets with strict capital requirements is now questioning its own stance. We are talking about the Basel Committee on Banking Supervision – that institution which usually prefers to slow things down rather than speed them up. But now a change of course is emerging that is making the industry worldwide take notice.
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The trigger is growing doubts about the capital requirements that were supposed to come into force on January 1. It was stipulated that banks must deposit virtually the same amount as collateral for every dollar of crypto assets. A concept that critics describe as impractical, too harsh, and strategically dangerous. In talks with the “Financial Times“, BCBS President Erik Thedeen now stated that “a new approach is needed.” This is not about cosmetic changes, but about the fundamental assumption of how risky digital assets actually are.
Crypto Rules on the Brink of Collapse: why Basel is Now Backtracking
Political pressure is rising. While regulators worldwide argue over details, a segment of the crypto market is growing rapidly: the so-called stablecoins. These tokens, which are pegged to currencies like the US dollar, were long considered a niche phenomenon, then a risk factor – and now suddenly as a system that has become too big to ignore. According to the “Financial Times”, the stablecoin market recently exceeded the $300 billion mark. It is being boosted by US politicians, including Donald Trump, as well as a bill in Congress which, under the name “GENIUS”, is providing additional tailwind.
Thedeen, also head of the Swedish Riksbank, speaks openly of a paradigm shift: “The enormous increase in stablecoins necessitates a rethink.” While the rules originally targeted Bitcoin and other open blockchains, a market segment is now coming into focus that has long been anchored in the traditional financial system. For regulators, the question thus arises whether the previous risk approach is still up-to-date.
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The pressure on regulators also comes from the banks themselves. Associations from the financial sector had warned the committee in a letter this summer that the regulation would make active participation in the crypto market “practically impossible.” This would result in traditional financial institutions being kept away from a growing market, while unregulated players become increasingly powerful.
Sentiment around BTC and Co. Is Shifting not Only in Europe
However, the mood is shifting not only in Europe. In the USA, the Federal Reserve openly signals that it does not intend to apply the planned rules with such severity. Michelle Bowman, responsible for supervision at the Fed, recently said: “We are not adopting these Basel risk weights. They are simply not realistic.” The Bank of England is also said to have internally decided, according to the “Financial Times”, not to implement the requirements as originally intended.
Thus, the committee faces a delicate task: The rules must be revised – but without breaking the painstakingly negotiated compromises between dozens of national authorities. Even Thedeen admits: “Moving forward is difficult because opinions within the committee diverge widely.”
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For the crypto industry, this uncertainty is paradoxical: On the one hand, it shows that the old formulas of regulation are crumbling. On the other hand, it remains open whether the new regulatory framework brings more freedom or new limitations. Only one thing is clear: The battle for interpretive authority over crypto risks has only just begun. (mck)
