Outdated bank rules may keep crypto outside the banks now allowed to hold it
Banks in the US, UK, and Europe can now legally offer stablecoin, Bitcoin custody, and tokenized settlement services, but Basel’s crypto capital rules still make many of those activities economically unattractive. Under SCO60, unbacked crypto like Bitcoin sits in the most punitive bucket with a 1,250% risk weight, effectively requiring capital equal to the full exposure and imposing extra limits that can sharply restrict holdings. The core problem is that the framework was built for an era when supervisors mainly wanted crypto kept out of banks, not for today’s mix of tokenized deposits, payment stablecoins, custody, reserve management, and on-chain settlement. As a result, a tokenized Treasury, a fully reserved stablecoin, and Bitcoin can face very different real risks but similar or even excessive capital treatment if they fail technical classification tests. Industry wants a risk-sensitive rewrite; the Basel Committee is reviewing parts of the standard. The outcome will shape whether digital-asset activity stays in banks or migrates to nonbank firms, and whether global rules fragment further across jurisdictions.
