A coalition of leading global financial trade associations are urging the Basel Committee on Banking Supervision (BCBS) to pause and recalibrate the Cryptoasset Exposures Standard (SCO60).
The coalition, called the Joint Trades, in a letter to Basel officials, highlighted what it called the “excessively conservative and overly punitive” capital treatment of crypto assets, which they said is misaligned with actual risks.
The Joint Trades urge the BCBS to make revisions to the crypto asset standard to better reflect actual risk profiles and to support responsible innovation within the regulatory perimeter.
The Joint Trades include the Global Financial Markets Association (GFMA) and its members the Asia Securities Industry & Financial Markets Association (ASIFMA), Securities Industry and Financial Markets Association (SIFMA) and the Association for Financial Markets in Europe (AFME); Bank Policy Institute (BPI); Futures Industry Association (FIA); Financial Services Forum (FSF); Global Blockchain Business Council (GBBC); Global Digital Finance (GDF); Institute of International Finance (IIF); International Swaps and Derivatives Association (ISDA).
The Joint Trades also released a report highlighting the transformative potential of Distributed Ledger Technology (DLT) in capital markets.
The report, titled “The Impact of DLT in Capital Markets: Ready for Adoption, Time to Act,” illustrates how tokenization and DLT are reshaping securities issuance, collateral management and fund operations. It also describes how the overall size and significance of the crypto asset market has increased, rendering many of the premises underlying the Basel standard outdated and requiring important adjustments.
Here are some of the key points in the report:
- DLT is ready to scale: Institutional adoption is accelerating, with tokenized money market funds and digital bond issuances gaining traction globally.
- Technology-neutral regulation is essential: The Joint Trades emphasize that prudential frameworks must focus on the underlying financial activity and risk—not the technology used. Overly conservative capital treatments for crypto assets risk pushing innovation outside the regulatory perimeter.
- Legislation and regulation must catch up: Reform needs to keep pace with development of DLT-based finance and market developments.
- DLT enables safer, more efficient markets: Use cases such as collateral management, fixed-income issuance and fund tokenization demonstrate reduced settlement times, improved liquidity and enhanced operational resilience.
The report also outlined six priority areas for ecosystem development:
- Accelerate market development in high-potential asset classes.
- Clarify legal foundations and align regulatory treatment.
- Establish interoperability to prevent market fragmentation.
- Address technical and operational integration gaps.
- Enable scalable settlement with tokenized money and stable payment instruments.
- Foster public-private coordination.
The Joint Trades said that the stage for mass adoption of tokenization in capital markets is set, driven by clearer regulatory pathways, mature technology platforms and committed institutional participation. They advocate for coordinated action to harness the benefits of DLT, modernize financial infrastructure and support sustained economic growth.