WASHINGTON, D.C., 19 August 2025 - A coalition of leading global financial trade associations (“the Joint
Trades”), together with Boston Consulting Group (BCG), Ashurst, and Sullivan & Cromwell as technical
advisors, issued a letter to the Basel Committee on Banking Supervision (BCBS) urging a pause and recalibration
of the Cryptoasset Exposures Standard (SCO60) and a comprehensive report highlighting the transformative
potential of Distributed Ledger Technology (DLT) in capital markets.
The Joint Trades recommend essential revisions of the Basel banking prudential treatment of cryptoassets and
pausing implementation of SCO60 ahead of its January 2026 effective date to allow for a targeted consultation
and redesign. The letter highlights the excessively conservative and overly punitive capital treatment of
cryptoassets that is misaligned with actual risks, in addition to various inconsistencies with current market risk
management practices. The Joint Trades urge the BCBS to make revisions to the cryptoasset standard to better
reflect actual risk profiles and to support responsible innovation within the regulatory perimeter.
The accompanying 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, with live use cases demonstrating significant efficiency gains, enhanced transparency and improved
risk management. Importantly, the report describes how the overall size and significance of the cryptoasset
market have increased, rendering many of the premises underlying the Basel standard outdated and requiring
important adjustments.
Key Report Highlights
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 cryptoassets 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.
Six priority areas for ecosystem development:
1. Accelerate market development in high-potential asset classes.
2. Clarify legal foundations and align regulatory treatment.
3. Establish interoperability to prevent market fragmentation.
4. Address technical and operational integration gaps.
5. Enable scalable settlement with tokenized money and stable payment instruments.
6. Foster public-private coordination.
The stage for mass adoption of tokenization in capital markets is set, driven by clearer regulatory pathways,
mature technology platforms and committed institutional participation. Now is the time for coordinated action
to harness the benefits of DLT, modernize financial infrastructure and support sustained economic growth.
About the Joint Trades
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).
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