US Pushes for Global Crypto Banking Overhaul as Stablecoins Disrupt Traditional Finance

Regulators scramble to keep pace with the $180B stablecoin boom—while banks cling to legacy frameworks like Blockbuster in the Netflix era.

The New Front in the Crypto Wars

Washington’s latest salvo? A demand for coordinated global rules on bank-held digital assets, targeting the wild west of dollar-pegged stablecoins. No more patchwork oversight—just as Tether’s market cap flirts with $100B.

Why This Hurts Traditional Finance

Banks now face their Kodak moment: adapt to crypto-native competitors or watch deposits flee to algorithmic yield protocols. The Fed’s solution? More committees. Meanwhile, Circle’s USDC quietly gobbles up 20% of commercial paper markets.

The Ironic Twist

After a decade fighting crypto, regulators now beg for ‘guardrails’—just as DeFi’s TVL surpasses JPMorgan’s cash reserves. Cue the revolving door: ex-SEC lawyers now drafting stablecoin policies for the very chains they once sued.

Wake-up call: When ‘risk management’ means copying Binance’s playbook, maybe the inmates are running the asylum.

Global Regulators To Review Crypto Standards

On Friday, Bloomberg affirmed that global regulators are in talks to review and potentially overhaul rules on banks’ crypto holdings, set to come into force in 2026. The US is reportedly leading the pushback against the original measures following the rapid surge of the stablecoin sector.

In 2022, the Basel Committee on Banking Supervision (BCBS) released its standard for the “prudential treatment of banks’ exposures to cryptoassets,” including tokenized traditional assets, stablecoins, and unbacked digital assets.

Senior finance executives reportedly affirmed that banks have largely interpreted the standards as “a signal to avoid crypto since they imposed a heavy capital burden on such holdings.” However, the crypto industry’s adoption has evolved in the past few years, with key players like the US changing their regulatory stance to embrace the sector.

According to people familiar with the talks, the shift has prompted debates at the BCBS regarding the suitability of these rules under the current environment, as major global jurisdictions, including the US and UK, haven’t committed to implementing them on time. The news media outlet noted that the Basel Committee updated its crypto standards in 2024 but delayed its implementation by one year.

As a result, the US has been seemingly leading calls to amend the standards, Bloomberg sources said, arguing that the rules are “incompatible with the industry’s evolution,” especially in the stablecoin sector.

Some countries allegedly see the US’s logic and favor reviewing the standards before they are widely implemented. Notably, the Bank of England (BoE) has stated that it “continues to work on the implementation of its prudential framework for cryptoasset exposures, and is engaging internationally with other jurisdictions to promote regulatory consistency.”

Meanwhile, the Monetary Authority of Singapore (MAS) recently announced a one-year delay of its new crypto prudential standards, which are based on the BSCS’s measures. On the contrary, the European Central Bank (ECB) considers that it’s best to implement the current standards and explore a revision later.

Global Stablecoin Regulatory Landscape

It’s worth noting that stablecoin regulation has faced challenges despite the global push to adopt the sector. The ECB has called for a ban on multi-issuance stablecoins in the bloc and other jurisdictions, following a recommendation by the European Systemic Risk Board (ESRB).

Additionally, the US banking industry has pushed back against the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act for potential loopholes that could pose major risks to the financial system.

Meanwhile, the Financial Stability Board (FSB), an international body that monitors and makes recommendations about the global financial system, recently vowed to address the evolving threats from private finance and the growing use of stablecoins.

In June, the Financial Action Task Force (FATF) expressed concerns about the increasing risks associated with the stablecoin adoption, arguing that the use of the digital assets by criminal parties poses a growing challenge to global financial security.

As reported by Bitcoinist, BoE Governor and FSB Chairman Andrew Bailey pledged earlier this month to increase the global watchdog’s policy response to the emerging risks related to the private finance sector and stablecoins, aiming to make it “more flexible and quicker to recognise, and respond to, emerging vulnerabilities.”

Bailey affirmed that the international watchdog will have “open and frank discussions among members” about the next steps, and will “increase outreach to the private sector to benefit from their expertise and perspectives on risks and vulnerabilities.”