According to the Financial Times (FT), the Chairman of the Basel Committee has called for a re-evaluation of cryptocurrency rules. Erik Thedeen, Chairman of the Basel Committee on Banking Supervision, said in a statement that rules regarding banks holding large amounts of capital to cover losses in cryptocurrencies should be revised. The head of the Basel Committee said a new approach is needed because the US and UK have avoided enforcing rules on stablecoins despite them not experiencing significant price swings like Bitcoin (BTC) and Ethereum (ETH). At this point, Thedeen stated that due to the widespread use of stablecoins and the increasing diversity of opinions among regulators around the world, a different approach is now required, but this will be difficult to implement. The rules, adopted by the Basel committee three years ago, will take effect on January 1, 2026. These rules stipulate that volatile crypto assets like bitcoin will be given a 1.250 percent risk weight. This ratio requires banks to hold $1 in capital for every $1 in cryptocurrency. According to the Financial Times, banks and financial institutions have called on the Basel committee to reassess the rules, stating that these regulations make participation in the crypto market economically unviable. At this point, banks are lobbying to ensure the rules are reviewed. Finally, the US central bank, the Federal Reserve, also has no intention of implementing the Basel rules for cryptocurrencies. Fed Vice Chair Michelle Bowman recently described the Basel rules as “very unrealistic.” The Bank of England (BoE) has also decided not to implement them in their current form, the FT reported. *This is not investment advice. Continue Reading: New Development Regarding Cryptocurrency Rules That the US and UK Reject! Will There Be a Backtrack?
