Joint Trades Submit Letter to BCBS Calling for Recalibration of Cryptoasset Prudential Standards

ISDA, in partnership with a coalition of leading global financial trade associations and with advisory support from Boston Consulting Group (BCG), Ashurst and Sullivan & Cromwell, submitted a letter to the Basel Committee on Banking Supervision (BCBS). The letter calls for a pause and recalibration of the cryptoasset exposures standard (ie, SCO60).

The asociations are urging BCBS to delay the implementation of SCO60, currently scheduled for January 2026, to allow time for a targeted consultation and redesign of the framework. The letter argues that the current standard imposes overly conservative and punitive capital requirements that do not accurately reflect the actual risks of cryptoassets and are inconsistent with established market risk practices. The letter emphasizes the need for a more balanced approach that aligns with actual risk profiles and encourages responsible innovation within the regulatory framework.

To that end, the associations propose a set of non-exhaustive recommendations to improve the cryptoasset standard, in line with core principles of safety, soundness and technology neutrality, including:

  1. Eliminating the distinction between permissioned and permissionless ledgers for Group 1 classification.
  2. Revising classification condition 2.
  3. Reconsidering the treatment of regulated stablecoins.
  4. Recognizing certain cryptoassets as eligible collateral.
  5. Reassessing the treatment of Group 2 cryptoassets.
  6. Allowing the use of internal models for market and counterparty risk.

Alongside the letter, the asociation also released a detailed report, The Impact of DLT in Capital Markets: Ready for Adoption, Time to Act. This report underscores the growing significance of the cryptoasset market and highlights the transformative potential of distributed ledger  technology (DLT) in capital markets. It argues that the evolution of the market has rendered many of the assumptions underpinning the Basel standard outdated, and that a reassessment is now necessary.

Episode 59: Reducing Burdens

As she nears the end of her term as chair of the European Securities and Markets Authority, Verena Ross joins The Swap to discuss progress in simplifying and reducing the burden of EU financial regulation, including transaction reporting. Please view...

CDS Market Dynamics: Record 2025

Global credit default swap (CDS) market activity reached a record $41.8 trillion in 2025, surpassing the previous peak of $38.7 trillion in 2022. Index CDS drove the increase, accounting for 93.3% of total activity and reaching a record $39.0 trillion....

ISDA Letter to BCBS on RMA Models

On July 24, ISDA wrote to the Basel Committee on Banking Supervision (BCBS) to request guidance on how the proposed Risk Mitigation Accounting (RMA) model under International Financial Reporting Standard (IFRS) 9/IFRS 7 should be treated for prudential regulatory capital...