Quick answer: SCO60 is the Basel Committee’s global standard for how much capital banks must hold against cryptoasset exposures. It sorts assets into Group 1 (tokenised traditional assets and qualifying stablecoins, treated much like their conventional equivalents) and Group 2 (everything riskier, including unbacked crypto like Bitcoin, which carries a punitive 1250% risk weight). It took effect January 1, 2026, after the Committee deferred it by a year.
Updated 07/17/2026. By Jake Claver. Educational content, not investment advice.
For years, banks that wanted to touch crypto faced a simple problem: no globally agreed rulebook told them how much capital to set aside against it. The Basel Committee on Banking Supervision, hosted at the Bank for International Settlements, closed that gap. Its standard, chapter SCO60 of the Basel Framework, is the prudential answer institutions had been waiting for. This is a capital-and-risk story about the banking system, not a signal about any particular token.
What SCO60 actually is
SCO60 sets out how the Basel Framework applies to banks’ exposures to cryptoassets. The standard defines cryptoassets as private digital assets that depend on cryptography and distributed ledger technology or similar technology, where a digital asset is a digital representation of value used for payment, investment, or to access a good or service. The full prudential treatment is laid out in the Committee’s finalized standard (BCBS d545). It applies to internationally active banks and creates a global minimum, so supervisors are working from the same baseline.
Group 1 versus Group 2
The heart of the standard is a classification test:
- Group 1a: tokenised versions of traditional assets that meet the classification conditions. Broadly, they get capital treatment equivalent to the underlying traditional asset.
- Group 1b: stablecoins with an effective stabilisation mechanism that pass the conditions, subject to additional requirements.
- Group 2: everything that fails the conditions, including unbacked cryptoassets like Bitcoin and stablecoins with weak pegs. This is the risky bucket.
As the December 2022 BIS press release put it, unbacked cryptoassets and stablecoins with ineffective stabilisation mechanisms face a conservative prudential treatment.
The 1250% risk weight and the 2% cap
Group 2b assets, the riskiest tier, carry a 1250% risk weight applied to the greater of a bank’s aggregate long or short position. In practice that ratio means a bank must hold capital roughly equal to the full value of the exposure, which is why direct Bitcoin holdings are so capital-expensive for a regulated bank. On top of that, a bank’s total Group 2 exposures should generally not exceed 2% of its Tier 1 capital. If exposures pass 1%, the excess falls into the harsher Group 2b treatment; if they breach 2%, the entire Group 2 book is treated as 2b. The design intent is to let banks participate carefully while keeping crypto risk from becoming systemic.
Why the start date slipped
The standard was finalized in December 2022 with an original implementation date of January 1, 2025. In May 2024, the Committee deferred implementation by one year to January 1, 2026, to give member jurisdictions time to adopt it in a full, timely, and consistent way. It is now in force in the Basel Framework as of that 2026 date, though each national supervisor transposes it into local rules on its own timeline.
From the source
Why this matters for market infrastructure
A shared rulebook reduces one of the biggest sources of hesitation for regulated institutions: not knowing the capital cost of an activity. With SCO60 in force, a bank can price the capital hit of holding, custodying, or tokenising an asset and plan accordingly. That clarity is what lets serious institutional payments and tokenization work move forward, and it fits alongside other public-sector oversight such as the CFTC’s digital asset resources in the United States. One honest caveat: SCO60 is a bank-capital framework. It does not endorse any specific network or token, so it should not be read as a signal about Stellar (XLM), XRP, or any other asset.
Common questions
What is Basel SCO60?
SCO60 is the chapter of the Basel Framework that sets how much capital internationally active banks must hold against cryptoasset exposures. It was finalized by the Basel Committee on Banking Supervision in December 2022 and took effect on January 1, 2026.
How does Basel classify cryptoassets?
Into two groups. Group 1 covers tokenised traditional assets (1a) and qualifying stablecoins (1b) that pass the classification conditions and get treatment close to their conventional equivalents. Group 2 covers everything that fails, including unbacked crypto like Bitcoin, and faces conservative capital treatment.
What is the 1250% risk weight?
Group 2b cryptoassets, the riskiest tier, carry a 1250% risk weight. That effectively requires a bank to hold capital equal to the full value of the position, making direct exposure to unbacked crypto very capital-intensive.
When did the Basel cryptoasset standard take effect?
It was originally set for January 1, 2025, but the Committee deferred it by one year in May 2024. It is now in force in the Basel Framework as of January 1, 2026, with national supervisors implementing on their own schedules.
Does SCO60 endorse any cryptocurrency?
No. It is a prudential capital standard for banks, not an endorsement. It does not favor any token or network, and none of this is investment advice.
This content is educational only. It is not tax, legal, or investment advice. Check primary sources and speak with a qualified professional before making financial decisions.
