Basel Committee's Amended Crypto Standards: A Wave of Regulations Is Shaping the Cryptocurrency Space

In recent months, regulatory authorities have expressed their position regarding various crypto assets. For instance, just this month, the CFTC declared that ETH

The Basel Committee has released the amended version of its crypto assets standards, which gives permissioned stablecoins preferential treatment.

According to the standards, crypto assets will be classified into two groups: Group 1 and Group 2. Group 1 assets will be further divided into three subgroups: 1a, 1b, and 1c.

Permissioned stablecoins, such as JPM Coin, will be classified under Group 1b, which is subject to capital requirements based on the risk weights of underlying exposures as set out in the existing Basel Framework.

On the other hand, other stablecoins, such as Tether’s USDT and USDC, will be classified under Group 2, which is subject to conservative capital treatment, limiting the exposure traditional financial institutions can have to them.

This classification has sparked strong reactions from the crypto community, with many accusing the Basel Committee of favoring traditional banks over cryptocurrencies.

Austin Campbell, the founder of Zero Knowledge, took to his X page to criticize the move.

“The fact that @BIS_org is trying to rig the tokenized cash market for banks should be unsurprising, given that the literal first word B in BIS stands for Bank,” he wrote.

“I said on @intangiblecoins podcast that private bank chains are a bridge to nowhere, and this sort of thing proves that I am correct – trying to win by competing fairly.”

In recent months, crypto regulations have been making headlines across the globe.

The European Union introduced MICA, a list of regulations that significantly impacted Tether’s USDT.

Meanwhile, Russia is pushing a new mining bill that will affect individuals in crypto mining while allowing state control over Cryptocurrency markets, as reported by AMBCrypto.

On the other side of the world, Argentina and South Korea have also proposed new crypto regulations.

Argentina’s regulations will have a massive impact on stablecoins as the country dollarizes its economy.