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Banks Urge Basel to Rethink Stablecoin Risk Treatment
21 Nov, 2025
Summary
- US banks and regulators push Basel Committee to ease stablecoin capital rules.
- Current rules treat stablecoins like volatile crypto assets, demanding high reserves.
- Basel chair acknowledges need for recalibration amid conflicting global views.
Global financial institutions and U.S. regulators are advocating for a revision of the Basel Committee's capital requirements concerning stablecoins. These digital assets, often marketed as stable, are currently subjected to the same rigorous capital reserve mandates as more volatile cryptocurrencies, a stance that is proving to be a significant barrier to their adoption by banks.
The Basel Committee's existing framework imposes a 1,250% risk weight on unbacked crypto assets, effectively requiring banks to set aside $1.25 for every $1 of crypto held. This stringent measure, finalized three years ago and set to be implemented soon, has largely deterred financial institutions from directly engaging with or holding these assets. Consequently, stablecoins like USDT and USDC have remained largely outside institutional balance sheets.
Erik Thedéen, chair of the Basel Committee, has acknowledged the dramatic surge in stablecoin usage and their increasing market presence necessitate a fresh regulatory perspective. However, he pointed to the complex challenge of achieving international consensus among diverse regulatory viewpoints. The committee is actively analyzing whether stablecoins on permissionless blockchains warrant a different risk assessment than initially conceived, especially as major economies adopt varied regulatory approaches.
