The Monetary Authority of Singapore (MAS) is postponing the implementation of the crypto rules for banks outlined by the Basel Committee on Banking Supervision (BCBS). While MAS intended to implement the rules in line with Basel’s 1 January 2026 target, it has delayed this by a year. A key reason cited by MAS is the Basel Committee’s treatment of permissionless blockchains and the pushback on this from banks.
For example, say a bank holds a tokenized money market fund (MMF) from a major asset manager such as BlackRock. If this MMF is hosted on a permissionless blockchain, then its risk weighting is 1250%, the same as unbacked cryptocurrencies. On the other hand, if the MMF were on a permissioned blockchain the token would be treated as a conventional MMF with no additional risk weighting. Given stablecoins are issued on permissionless blockchains, the current version of Basel rules makes it tricky for banks to engage with stablecoins.
This extreme disparity in treatment has prompted significant industry concern. Global capital markets and banking associations have been repeatedly pushing back on the BCBS permissionless blockchain position, with opposition in the past few months becoming more strident. The whole point of the Basel rules is to try to establish globally consistent standards. Instead, jurisdictions are taking varied approaches to this permissionless blockchain issue. These range from ignoring the type of blockchain to requiring risk mitigation steps or even rejecting the rules outright.
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