Eight major financial associations have approached global regulators requesting a pause on the introduction of strict cryptocurrency banking rules, arguing that this could lock traditional banks out of the growing digital asset market.
Request to Pause New Regulations
Financial associations, including the Global Financial Markets Association and the Institute of International Finance, sent a letter to the Basel Committee on Banking Supervision (BCBS) asking to temporarily pause the rollout of new capital requirements set to take effect in January 2026.
Critique of Current Standards
The associations noted that the new rules are outdated and contain 'punitive capital treatments' that could make cryptocurrency activities unprofitable for banks. They argue that the failure to adopt more flexible standards risks pushing digital assets into less-regulated areas of the financial sector.
Consequences of Implementing Regulations for Banks
The BCBS standards were drafted in response to failures that nearly wiped out the digital asset industry in 2022. The letter suggests revising the existing risk assessments for digital assets and proposes a more balanced regulatory approach, possibly eliminating the distinction between permissioned and permissionless ledgers.
The associations are urging the BCBS to halt the implementation of the new rules, believing that this will help balance regulation and improve market participation in digital assets.
