Wall Street Trade Groups Urge Basel Committee to Rethink Crypto Capital Standards

Eight major financial trade associations, including the Global Financial Markets Association and the Institute of International Finance, are pushing back against the Basel Committee's proposed crypto capital requirements. The groups argue that the 1,250% risk weighting set to take effect in January 2026 would effectively exclude regulated banks from the $2.8 trillion digital asset market.

The coalition's letter warns that current standards reflect outdated risk perceptions from the 2022 market turmoil rather than today's more mature regulatory environment. Industry experts note these punitive capital treatments could drive crypto activity to less regulated venues, contrary to global financial stability goals.

While Basel standards aren't legally binding, they typically FORM the basis for national banking regulations worldwide. The outcome of this debate will determine whether traditional financial institutions can compete meaningfully in crypto markets as institutional adoption grows.