What Has Changed

Erik Thedéen, chair of the BCBS and governor of Sweden’s central bank, warned that existing rules forcing banks to hold extremely high capital against crypto assets are no longer fit for purpose. The most stringent rules approved by the committee would require banks to assign a risk weight of 1,250 % to many crypto assets—a requirement making bank participation in crypto effectively impossible.

The United States and the United Kingdom have indicated they will not implement these exact rules. Thedéen called for a “different approach” as divergent national responses threaten to undermine global coherence in bank regulation.

Why This Matters

Banks are now a key entry route for crypto assets into mainstream finance. If the rules are too strict, banks cannot engage, limiting the growth of regulated crypto infrastructure. If rules are too loose, risks such as liquidity stress and contagion increase. The current impasse signals that regulators, banks and crypto firms are all waiting for a fresh framework.

Thedéen pointed to the rapid growth of stablecoins—now valued at several hundred billion dollars—as evidence that the world has changed since the rules were first drafted. Banks and regulators may need to adopt new risk models, not rely on old templates.

Impact on Crypto and Financial Markets

For crypto firms, banks’ reluctance could slow institutional access, custody services and integration with regulated markets. For banking groups, unwillingness to adopt the rules could limit their crypto participation or expose them to uneven regulation across jurisdictions.

Global capital markets may experience fragmentation: banks in some jurisdictions excluded from crypto participation will cede advantage to those in more permissive areas. This could lead to regulatory arbitrage and shift competitiveness across financial centres.

Challenges Ahead

Achieving global consensus is harder now than ever. Divergent national interests, regulatory cultures and economic priorities make coordination difficult. Thedéen admitted the situation is challenging but noted that all major parties remain “in the room.”

Another issue is how to design capital rules that account for tokenised assets, permissionless networks and rapid innovation. Traditional banking standards struggle to keep pace with the crypto ecosystem’s evolution.

Regulators must also consider how rules affect bank lending, innovation and financial inclusion. Too much capital burden could reduce credit flows or push activities outside the regulated sector.

Outlook

The BCBS has indicated it will review the rules and seek a revised approach. For now, banks operating in different jurisdictions face uncertain pathways into crypto. The next few months will be pivotal: will new rules emerge or will global divergence deepen?

For the crypto sector, the outcome may determine how fast institutional participation grows and whether banks can become real bridges into regulated digital-asset markets.