Finance Groups Push Basel to Ease Crypto Rules

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A coalition of leading financial industry bodies is urging global regulators to reconsider strict banking standards for cryptocurrency exposure, warning that the current framework risks shutting banks out of digital asset markets.

The appeal, directed at the Basel Committee on Banking Supervision, highlights concerns over rules adopted in 2022 that were designed to govern how banks disclose and manage risks related to crypto holdings. While the measures were intended to strengthen oversight after a wave of market failures, industry groups argue they have quickly become outdated as the crypto landscape evolves.

In an open letter, signatories including the Global Financial Markets Association, the Institute of International Finance, and the International Swaps and Derivatives Association pressed the committee to delay the scheduled rollout of the standards. They contend that the guidelines, set to take effect in January 2026, impose punitive capital requirements that make it nearly impossible for banks to participate in the digital asset sector on competitive terms.

“The Cryptoasset Standard’s restrictive qualification standards, combined with otherwise punitive market and credit risk capital treatments, effectively make it uneconomical for banks to meaningfully participate in the cryptoasset market,” the groups wrote.

The finance bodies stressed that the industry has changed dramatically since the 2022 collapse of several high-profile crypto firms, which led to massive investor losses and calls for stricter regulation. They noted that despite those failures, cryptocurrencies have rebounded, reaching record valuations and becoming increasingly integrated with mainstream markets.

The groups argue that banks should not be excluded from this growth due to regulatory overreach, particularly at a time when governments are shifting their approach. In the United States, regulators have recently softened their stance, giving banks more leeway to engage in crypto-related activity. President Donald Trump’s administration has openly signaled a more favorable view of digital assets, further encouraging institutions to enter the sector.

The Basel Committee itself does not directly enforce rules, but its standards carry significant weight as member states generally adopt them into national banking regulations. That means the committee’s crypto framework, once in force, would apply across leading financial centers worldwide.

The Bank for International Settlements, which houses the Basel Committee, did not immediately respond to requests for comment.

Industry representatives maintain that a blanket approach will not serve financial stability. Instead, they are calling for a “temporary pause” on implementation, alongside a broader consultation process that reflects current market realities and technological progress.

Observers note that the crypto industry remains relatively small compared to global financial markets, but its expansion over the past decade suggests it is no longer a niche phenomenon. Many banks view digital assets as an inevitable part of future financial services and want clarity on how to participate without facing disproportionate penalties.

At the same time, regulators remain wary. The 2022 wave of bankruptcies, including the collapse of major exchanges and lending platforms, exposed reckless practices, poor governance, and in some cases, outright fraud. Authorities argue that without firm rules, banks could be drawn into similar crises, potentially putting the wider financial system at risk.

With the January 2026 deadline approaching, the debate underscores the tension between risk management and innovation in global finance. Whether the Basel Committee will soften its stance remains uncertain, but pressure from industry groups suggests banks are determined not to be left on the sidelines as the crypto economy continues to expand.