Basel III's SCO60 standard assigns unbacked crypto a 1,250% risk weight effective January 2026, making Bitcoin 12.5x costlier for banks to hold than equities.
- Basel III's SCO60 standard, effective January 2026, imposes a 1,250% risk weight on unbacked crypto assets like Bitcoin, making it 12.5x more expensive for banks to hold than equities.
- This punitive capital requirement effectively prohibits banks from holding significant proprietary crypto positions, pushing them towards fee-based custody models or excluding them from the market.
- The high capital costs create a significant arbitrage opportunity for DeFi protocols and crypto-native custodians, which operate outside the Basel framework, leading to increased demand for tokenized traditional assets (Group 1a) and stablecoins (Group 1b) that have more favorable capital treatment.
Topics: Legal regulatory, Institutional adoption, Blockchain usage, Securities law classification, Banking depository pilots, Ethereum evm l 1 s
Tags: #baseliii #sco60 #bitcoin #riskweight #capitalrequirements #banks #cryptoassets #custody #defi #tokenization
No comments:
Post a Comment