The Basel crypto standard: how banks must capitalise your tokens
The global bank capital rule for cryptoassets took effect in January 2026 and is already under review. Here is how it works and why it reaches you.
If your company banks with, borrows from, or issues tokens held by a regulated bank, the Basel Committee's cryptoasset standard shapes how expensive that relationship is for the bank. The standard sits in the Basel Framework as chapter SCO60, the version in force is dated 1 January 2026, and the Committee is currently reviewing parts of it [1][4].
The standard does not change your own financial statements. It sets how much capital a bank must hold against crypto exposures, which in turn affects pricing, appetite and the questions a bank will ask about the tokens you hold or issue.
Four buckets, decided by the bank
Banks must screen each cryptoasset on an ongoing basis and place it in one of two groups, each split in two [1].
| Group | What falls in it | Broad capital effect |
|---|---|---|
| 1a | Tokenised traditional assets (bonds, deposits, equities, commodities) that meet the classification conditions | Generally treated like the non-tokenised asset |
| 1b | Tokens with an effective stabilisation mechanism, such as a stablecoin, that meet the conditions | Capital based on the reference assets plus redeemer and intermediary risk |
| 2a | Tokens that fail the conditions but meet hedging recognition criteria | Modified market risk rules with limited hedge recognition |
| 2b | Everything else | 1250% risk weight, no hedge recognition |
To reach Group 1, a token must meet four classification conditions. For a stablecoin, these include a redemption risk test: reserves must be sufficient for redemption at the peg value at all times, including under extreme stress, and the issuer must be supervised by a regulator that applies capital and liquidity requirements [1]. Supervisors may also add an infrastructure risk charge to Group 1 exposures; it starts at zero and can be raised if weaknesses are observed in the underlying ledger [1].
Group 2a is a narrow lane for liquid unbacked tokens. Among other tests, the token needs an average market capitalisation of at least USD 10 billion over the prior year, a trimmed mean daily trading volume of at least USD 50 million against major fiat currencies, and a regulated derivative or exchange-traded product referencing it [1]. Anything else is Group 2b by default unless the bank shows a supervisor that the criteria are met [1].
The 1250% weight and the exposure cap
A 1250% risk weight is designed so that the bank holds minimum risk-based capital at least equal in value to its Group 2b exposure [1]. In plain terms, a bank's own capital must absorb the full amount, as if the position could go to zero.
Banks also face a limit on total Group 2 exposure. It should generally stay below 1% of Tier 1 capital and must not exceed 2%. Breaching 1% pushes the excess into Group 2b treatment; breaching 2% pushes all Group 2 exposure there [1].
- Bank Tier 1 capital: 2,000m. Soft limit on Group 2 exposure (1%): 20m. Hard limit (2%): 40m.
- Group 2b position: 10m of an unbacked token.
- Risk-weighted assets: 10m x 1250% = 125m.
- Effect: the bank must fund this position with capital at least equal to the 10m exposure.
- Figures are illustrative; actual exposure measurement follows SCO60 detail on long and short positions.
Why the review matters
In November 2025 the Committee agreed to speed up a review of targeted elements of the standard, citing developments in cryptoasset markets [2]. Central bank governors and heads of supervision endorsed that review in March 2026 [3]. In its 1 October 2026 release, the Committee said it had advanced the work and expects to provide an update by the end of the year [4].
The Committee has not said publicly which elements are in scope. As of October 2026, any view on the outcome is speculation until the Committee publishes.
National implementation differs
Basel standards apply only once a jurisdiction writes them into its rules. Two examples show how far apart those paths can be.
- United Kingdom: a Prudential Regulation Authority letter dated 18 May 2026 replaced its 2022 interim expectations. It says the PRA expects to consult on a full framework in 2028 at the earliest, after the Basel review ends. In the meantime it expects a 100% capital requirement for unbacked cryptoassets under the market risk framework, and says tokenised traditional assets should generally get the same treatment as their non-tokenised equivalents where rights and risks match [5].
- European Union: the Capital Requirements Regulation contains a transitional regime for crypto exposures. The European Banking Authority published final draft technical standards in August 2025 that align with the Basel standard as far as possible and take account of MiCA, pending adoption by the European Commission [6].
The PRA letter also makes a link accountants will recognise: where direct crypto holdings are classified as intangible assets under the applicable accounting framework, they are deducted from common equity tier 1 capital under UK rules [5]. That is one place where an accounting classification has a direct capital consequence.
What this means for crypto finance teams
For a stablecoin issuer, whether a bank can treat your token as Group 1b depends on evidence about reserves, redemption and supervision. For a token issuer or treasury, banks holding or lending against unbacked tokens face full-capital treatment, which tends to show up as tighter limits or higher pricing. For a tokenised deposit or fund, banks will look for proof that legal rights match the traditional form.
What to do
- Ask your banks how they classify the tokens you hold, issue or post as collateral, and whether that affects limits or pricing.
- If you issue a stablecoin, map your reserve, redemption and attestation evidence to the redemption risk test in SCO60 so banking partners can rely on it.
- Track the Basel update expected by year end 2026 and your home regulator's implementation timetable.
- Keep your own accounting classification (intangible, inventory, financial asset, fair value) documented, because counterparties increasingly ask for it.
Sources
- SCO60 Cryptoasset exposures (Basel Framework, version effective as of 01 January 2026) (Basel Committee on Banking Supervision (BIS))
- Basel Committee continues to prioritise Basel III implementation, approves final principles on third-party risks and agrees to expedite targeted review of cryptoasset standard (BIS)
- Governors and Heads of Supervision welcome progress to implement Basel III and discuss elements of the Basel Committee's work programme (BIS)
- Basel Committee meets to advance supervisory and regulatory initiatives and discuss risks and vulnerabilities to the global banking system (BIS)
- Prudential treatment of tokenised assets, stablecoins, and other cryptoasset exposures (Dear CEO letter, 18 May 2026) (Bank of England / Prudential Regulation Authority)
- The EBA publishes draft technical standards on the prudential treatment of crypto asset exposures under the Capital Requirements Regulation (European Banking Authority)
General information for finance teams, current as of publication. Not legal, tax or accounting advice.