Singapore delays Basel crypto banking rules to 2027

The Monetary Authority of Singapore will postpone the implementation of the Basel Committee’s crypto regulations from 2026 to 2027 to give banks more time to adjust.

According to a report by Caixin media, the nation’s financial watchdog revealed in a consultation summary that it plans to postpone the implementation of new bank capital regulations based on the Basel committee’s new crypto asset framework.

Initially, the government had planned for the new crypto banking regulations to take effect on January 1, 2026. However, after receiving feedback from 13 parties with ties to the financial and web3 industry, authorities have decided to push back the date to January 1, 2027 or even later.

Based on the summary, the Singaporean financial authorities asked for feedback from several respondents, including the stablecoin issuer Circle. MAS reported that it has received anonymous and non-anonymous feedback which revealed respondents were concerned about the new crypto laws.

A majority of the respondents reportedly stated that the implementation of Basel crypto asset capital regulations on January 1, 2026 or earlier could lead to a possible “regulatory arbitrage.” This means that respondents fear companies could easily take advantage of the shift in regulations to get away with minimizing costs or avoid unfavorable rules.

Because of the feedback received, the Singaporean authority has decided to give banks an additional year to adjust to the incoming Basel Committee regulations on Banking Supervision’s global standards for crypto asset exposures.

Is Singapore falling behind?

Singapore’s decision to delay the implementation of the Basel Committee’s crypto framework for another year comes at a time when other regions are already moving forward with the changes. Hong Kong in particular has come up with similar capital requirements for crypto assets created based on the Basel regulations.

The HKMA has finalized the regulatory framework for the Basel crypto-asset capital rules and will reportedly start implementing them in January 2026.

Meanwhile, the European Union has also begun incorporating the Basel revised crypto standard via its Capital Requirements Regulation III or CRR3 legislative package. Unlike Hong Kong and Singapore, this regulation had already taken effect since January 1, 2025. However, some areas in the EU are taking longer than others in implementing these rules, with the Market Risk Framework delayed until January 1, 2026.

On the other hand, Switzerland has also chosen to delay adopting the Basel crypto standard which will be put in place through the Capital Adequacy Ordinance. In 2024, a plan to introduce the regulation ignited backlash from the Swiss Blockchain Federation, which expressed concern that the new rules would not be compatible with the country’s current blockchain advancement strategy.

What do the Basel Committee rules entail?

The Basel Committee’s framework was first introduced in mid 2022. Dubbed “Prudential Treatment of Cryptoasset Exposures” the consultation is built upon the committee’s earlier 2021 regulations. Regulators believe that with the rapid growth of the crypto market, certain guardrails should be in place in order to ensure financial stability as banks start getting involved with crypto assets.

The committee divides crypto assets into two groups, Group 1 consist of tokenized traditional assets with a stable value while Group 2 consists of purely crypto assets like Bitcoin (BTC) and Ethereum (ETH). Each group is linked to different risk weights, including a 250% risk weight for Group 1b and a higher 1,250% risk weight for Group 2b crypto assets. Group 2b assets are digital assets that fail to meet the hedge recognition criteria set up by the committee.

The framework aims to ensure consistent international prudential treatment and addresses minimum capital requirements for credit risk, market risk, and other risks. The implementation of these rules are expected to align with international Basel standards and regional regulations.