The Basel crypto rules that govern how banks hold digital assets took effect on January 1, 2026, and the body that wrote them is already reviewing them. The Basel Committee on Banking Supervision, housed at the Bank for International Settlements, confirmed at its meeting on February 24 and 25 that a targeted review is underway, with an update due later in the year. The rules decide which crypto assets a bank can hold cheaply and which ones cost a full dollar of capital for every dollar of exposure.
What the Basel Framework Actually Does
Strip the jargon and the Basel Framework is a sorting system. For decades it has told banks how much capital to set aside against each asset they hold, assigning a risk weight to every one: near zero for a developed-country government bond, much higher for an unsecured corporate position. SCO60, the chapter that took force this year, extends that same logic to crypto.
It splits digital assets into two families. Group 1 covers tokenized traditional assets (Group 1a) and stablecoins that pass a redemption test (Group 1b), which are treated much like the bond or cash they stand in for. Group 2 covers everything else, including Bitcoin and Ether, and divides into 2a, where some hedging is recognized, and 2b, where none is.
The 1,250% Number
The figure that draws attention is the 1,250% risk weight on Group 2b assets like Bitcoin. It looks arbitrary until you trace it: 1,250% is the reciprocal of the 8% minimum capital ratio in the Basel rules, so a bank must hold a dollar of capital for every dollar of Group 2b exposure. Analysts call it a dollar-for-dollar charge, and in practice it makes carrying unbacked crypto on a bank balance sheet expensive enough to deter it.
A second constraint caps the total. A bank’s Group 2 exposure should generally stay below 1% of Tier 1 capital and must not exceed 2%, per the Committee’s December 2022 standard. Breach the ceiling and the punitive treatment applies to the entire Group 2 book, not just the excess.
Where the Pushback Is Coming From
The fight is over stablecoins. A coalition of industry bodies including the GFMA and ISDA wrote to the Committee in 2025 urging a pause and recalibration, arguing the standard predates the current size of the market and sweeps too much into the high-risk bucket. One of their asks is to scrap the Group 2 exposure limit outright. United States regulators have made a narrower case, reported by Bloomberg in October 2025: applying the same 1,250% weight to a reserve-backed stablecoin such as USDC as to Bitcoin overstates the risk.
Jurisdictions are not moving in step. The European Central Bank has preferred to implement the rules first and review them later, and the EU already lets banks treat qualifying stablecoins in line with their reserve assets. Singapore has proposed pushing its start date to 2027 or beyond. Hong Kong is implementing while tuning its treatment to welcome licensed stablecoins. The standard is global, yet it binds only when each national supervisor writes it into local law, and that is where the consensus is fraying.
Why It Matters
For any bank weighing a crypto or tokenization desk, the review now matters more than the rule on the page. US banking regulators reversed years of discouragement in 2025, and the GENIUS Act gave dollar stablecoins a federal footing that July. Banks are lining up custody and tokenization projects on the assumption that the capital math will keep improving.
The Group 1a treatment is the quiet tell. By letting a tokenized Treasury bill carry the same risk weight as the bill itself, Basel has already decided that tokenization is a packaging change, not a new risk. That is the green light the tokenized-asset market has been waiting for.
So this sets up the question that matters for 2026. If the Committee softens the stablecoin treatment but holds the line on unbacked crypto, these rules will have drawn the map for which digital assets banks can hold at scale and which stay parked at the edge of the system. The number that settles it is not 1,250%. It is whatever the review lands on next.
Disclosure: The author holds no position in the assets or companies named and has no relationship with them. This article is for informational purposes only and does not constitute financial advice.
