Basel Committee's Revised Crypto Asset Standard Favors Permissioned Stablecoins
The Basel Committee, responsible for establishing regulations for banks, has updated its guidelines for crypto assets, specifically impacting stablecoins. The new standard prioritizes permissioned stablecoins, like JPM Coin issued on private blockchains, over those issued on public chains. This decision has sparked criticism from members of the crypto community, who accuse the committee of trying to manipulate the tokenized cash market.
The Basel Committee, known for setting standards to regulate banks and promote self-regulation within the industry, has amended its previously finalized crypto asset standard. The committee has introduced a set of requirements that put the future of the stablecoin market at risk.
According to the new guidance, stablecoins issued on permissioned, private blockchains, such as JPM Coin, will receive regulatory advantages. On the other hand, stablecoins like USDT and USDC, which are issued on multiple public blockchains, will be penalized. The guidance states that the former type of stablecoins will be classified as "Group 1b" and will be subject to capital requirements based on the risk weights of underlying exposures, as outlined in the existing Basel Framework.
Stablecoins like USDT and USDC, on the other hand, will fall under the "Group 2" classification, which entails conservative capital treatment and limits the exposure that banks can have on these stablecoins.
Austin Campbell, founder of Zero Knowledge Consulting, strongly criticized the amendments made to the original standard, accusing the Bank for International Settlements (BIS) of attempting to manipulate the tokenized cash market for the benefit of banks. Campbell suggested that institutional asset managers, insurance companies, and payments companies should consider creating their own stablecoins to bypass the banks altogether.
Caitlin Long, from Custodia Bank, also expressed concern about the regressive nature of these amendments, emphasizing that the BIS was leading the U.S. in the crypto industry but has now taken a step backward.
These new standards are scheduled to be implemented on January 1, 2026.
What are your thoughts on the treatment of public stablecoins in the Basel Committee's revised crypto asset standard? Share your opinions in the comments section below.
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