A coalition of prominent financial trade associations, collectively known as the Joint Trades, has called for significant revisions to the Basel Committee on Banking Supervision’s (BCBS) forthcoming Cryptoasset Exposures Standard, set to take effect in January 2026.
The group, which includes the Global Financial Markets Association (GFMA), the Securities Industry and Financial Markets Association (SIFMA), and the Association for Financial Markets in Europe (AFME), has criticized the standard as overly restrictive and misaligned with the actual risks posed by cryptoassets.
In a letter to the BCBS, the associations advocate for a pause and overhaul of the standard, arguing that its current form stifles innovation while failing to accurately reflect the risk landscape of digital assets.
The BCBS, a global standard-setting body for banking regulation, released its final disclosure framework for the prudential treatment of cryptoassets in July 2025.
Known as SCO60, the framework outlines capital requirements and risk management protocols for banks engaging with crypto-assets.
However, the Joint Trades contend that the standard’s approach is excessively conservative, imposing punitive capital requirements that could deter banks from participating in the growing cryptoasset market.
The group argues that these measures do not adequately differentiate between the diverse risk profiles of various cryptoassets, potentially undermining the industry’s ability to innovate responsibly within a regulated environment.
In their letter, the Joint Trades emphasize the need for a recalibration of SCO60 to better align with the realities of the cryptoasset ecosystem.
They propose that the BCBS initiate a consultation process to gather input from industry stakeholders and redesign the standard to foster a more balanced regulatory approach.
Such revisions, they argue, would enable banks to engage with cryptoassets in a way that supports tech advancements while maintaining financial stability.
The associations stress that a well-calibrated framework is essential to ensure that the banking sector can safely participate in the evolving digital asset market without facing undue regulatory burdens.
In addition to their critique of SCO60, the Joint Trades have released a comprehensive report exploring the transformative potential of distributed ledger technology (DLT) and tokenization in capital markets.
The report highlights how these technologies are revolutionizing key financial processes, including securities issuance, collateral management, and fund operations.
It points to growing institutional adoption, maturing technological platforms, and clearer regulatory frameworks as key drivers of tokenization’s rise.
According to the report, these developments are paving the way for widespread adoption of tokenized assets, which could enhance efficiency, transparency, and accessibility in capital markets.
The Joint Trades assert that the financial industry is at a critical juncture, with tokenization poised to reshape the infrastructure of global markets.
They argue that DLT offers opportunities to modernize outdated systems, streamline operations, and drive economic growth.
However, they caution that overly stringent regulations, such as those proposed in SCO60, could hinder this progress by discouraging banks from exploring tokenized assets or other blockchain-based innovations.
To fully realize the benefits of DLT, the associations call for coordinated action among regulators, financial institutions, and technology providers to create a supportive ecosystem for responsible innovation.
The pushback from the Joint Trades underscores a broader tension between regulatory caution and the financial industry’s desire to embrace emerging technologies.
As the January 2026 implementation date for SCO60 approaches, the BCBS faces increasing pressure to reconsider its approach to cryptoasset regulation.
By addressing the concerns raised by the Joint Trades, the committee has an opportunity to craft a framework that balances risk management with the need to foster product development / tech advancements.
For now, the financial industry awaits the BCBS’s response, hoping for a regulatory environment that enables the safe and sustainable integration of crypto-assets into the global financial system.