Regulators Plan to Ease Stablecoin Capital Requirements
Global regulators, led by the Basel Committee, are set to review and lower stablecoin capital requirements originally slated for full enforcement in 2025. The 2022 Basel standard imposes a 1,250% risk weight on permissionless stablecoins such as USDT and USDC, which US, EU, UK and Singapore authorities deem excessive. Proposed adjustments would align stablecoin capital requirements with their reserve backing and push implementation to 2026, while the enforcement deadline has already been delayed by one year.
Lowering stablecoin capital requirements could encourage banks to expand custody and payment services for USDT and USDC, boosting market liquidity and institutional adoption. Traders should monitor updates from the Basel Committee, US regulators, the EU capital package and forthcoming UK, Singapore and Hong Kong frameworks for potential impacts on bank demand and overall crypto-market stability.
Bullish
Easing stablecoin capital requirements is likely bullish for the market. In the short term, lowering the 1,250% risk weight should reduce banks’ funding costs and encourage them to offer custody and payment services for USDT and USDC, boosting trading volumes and liquidity. Over the longer term, aligning capital rules with reserve backing will increase institutional confidence in stablecoins, drive broader adoption and strengthen stablecoin market stability. Traders can expect improved market access and greater institutional participation once the new rules take effect in 2026.