Key Notes
- Wall Street groups urge the Basel Committee to pause 2026 crypto banking rules.
- Trade bodies warn strict capital requirements could push crypto outside banks.
- SEC Chair Paul Atkins signals only a small fraction of tokens may be securities.
A coalition of leading Wall Street trade groups is calling on global regulators to halt the rollout of strict crypto banking rules set to take effect in January 2026.
In an August 19 letter to the Basel Committee on Banking Supervision, eight associations warned that the rules would make it too costly for banks to engage with crypto, potentially pushing the $2.8 trillion market outside the regular financial system.
Trade Groups Push Back Against Punitive Standards
The eight associations also included the Global Financial Markets Association and the Institute of International Finance. The Basel rules, though non-binding, are usually adopted by member countries and shape how international banks manage risk.
Under the current framework, Bitcoin BTC $112 805 24h volatility: 2.2% Market cap: $2.24 T Vol. 24h: $46.60 B and Ethereum ETH $4 146 24h volatility: 3.6% Market cap: $499.99 B Vol. 24h: $40.18 B carry a 100% risk weight, while many other crypto assets are saddled with a 1,250% penalty, far higher than requirements for corporate bonds or equities.
Banks are also limited to holding no more than 1% of their Tier 1 capital in “Group 2” crypto assets under the new cryptocurrency rules.
Outdated Perceptions
The associations argue that the policies reflect outdated perceptions shaped by collapses such as Terra/Luna in 2022 .
Policy approaches are fundamentally different in 2025 compared to when the rules were first laid out, the letter noted, cautioning that inconsistent adoption could “jeopardize the goal of establishing a minimum standard.”
SEC Signals Shift on Token Classification
Meanwhile, the SEC Chair Paul Atkins, speaking at the Wyoming Blockchain Symposium, suggested only a small fraction of tokens should be classified as securities.
“Just the token itself is not necessarily the security, and probably not,” Atkins said, a notable pivot from his predecessor Gary Gensler’s stance that most digital assets fell under securities law.
Project Crypto Initiative
Atkins emphasized the SEC’s “Project Crypto” initiative , which aims to establish clearer rules for digital assets while Congress works on broader legislation.
Lawmakers are advancing the Digital Asset Market Clarity (CLARITY) Act, with both the House and Senate pushing toward a market structure bill as early as September.
Senate Banking Committee Chair Tim Scott indicated bipartisan support, with up to 18 Democrats potentially backing the legislation.
