Global banking regulators are planning to fast-track their review of the prudential standards for banks’ crypto asset holdings.
Following its latest round of meetings in Mexico City this week, the Basel Committee on Banking Supervision said that it agreed to expedite a review of certain elements of its approach to banks’ crypto asset exposures, citing “recent crypto asset market developments,” as the reason for the accelerated review.
The committee’s revised final standard is due to be implemented on Jan. 1, 2026.
Earlier this year, a collection of industry trade groups called for the regulators to pause its adoption, and revise the standard, arguing that “the excessively conservative and overly punitive capital treatment of crypto assets that is misaligned with actual risks…”
Among other things, the trade groups called for revisions, “to better reflect actual risk profiles and to support responsible innovation within the regulatory perimeter.”
At the same time, efforts to regulate the fledgling crypto sector, particularly stablecoins, have gathered momentum in recent months. For instance, Canada’s latest federal budget included a promise to establish a legislative framework for stablecoins.
Apart from the crypto issue, at the same meeting, the Basel Committee also approved a set of final principles for managing third-party risk in the banking sector. The principles will be published next month, as will a consultation paper on improving the accessibility of data on banks’ risk profiles.
The Committee said that it’s also continuing to monitor fintech developments, including the growing use of artificial intelligence by banks. And, it stressed the the full implementation of the capital regime, known as Basel III, remains its top priority — despite the fact that the adoption of some of these measures have stalled in various jurisdictions, including Canada, the U.S. and Europe.