New Basel Rules Tighten Grip on Banks' Crypto Activities

The Basel Committee on Banking Supervision has finalised its disclosure framework for banks' crypto exposures.

Targeted amendments to cryptoasset standards aim to tighten criteria for stablecoins seeking preferential regulatory treatment. Both standards will come into effect on 1 January 2026.

Framework Overview

After over a year of development, the updates, published on 17 July, seek to enhance transparency and ensure a consistent regulatory approach in the growing digital asset sector.

According to the Committee, the final disclosure framework and amendments to the cryptoasset standard are significant steps towards enhancing the robustness of banks' engagement with the crypto market.

Disclosure Standards (DIS55)

The new disclosure framework, known as DIS55, mandates banks to provide detailed information on their crypto activities through standardised tables and templates.

This includes qualitative descriptions of crypto-related business and quantitative data on capital and liquidity requirements.

The standardisation aims to improve market discipline and reduce information gaps among market participants.

The Committee asserts that these measures will contribute to greater market transparency and stability, supporting the broader financial system.

The Basel Committee has also made technical amendments, such as removing certain detailed requirements and clarifying disclosure scope.

The Committee emphasises its commitment to monitoring developments in the crypto markets and adapting the regulatory framework to address emerging risks.

Reporting Requirements

Banks must share their risk assessment methodologies and asset classifications.

They also need to provide data on crypto exposures and related capital requirements, including accounting classification and liquidity needs.

The framework requires banks to disclose average daily values of their crypto holdings to give a clearer picture of risk levels. Despite industry feedback, banks are still required to report credit and market risks for tokenised assets separately.

Stablecoins and Materiality

The updated standards introduce a new definition of "materiality" for certain crypto-assets and set thresholds for mandatory disclosures.

The criteria under which certain stablecoins can receive preferential "Group 1b" regulatory treatment have been tightened. These changes aim to clarify the regulatory framework and promote consistent understanding across jurisdictions.