The proposal is considered to play a critical role in determining how major banks operating in the US will interact with Bitcoin and similar digital assets.

Fed Preparing to Publish New Basel Proposal

According to information from officials, the Fed is expected to publish a draft in the coming days explaining how banks should apply risk-weighting rules under the Basel Accords. This regulation will particularly cover large-scale American banks.

Following the publication of the proposal, an approximately 90-day public comment period will begin. During this period, financial institutions, industry representatives, and policy organizations will be able to submit their views and suggestions regarding the draft regulation to the authorities.

The Bitcoin Policy Institute is among the organizations planning to take an active role in this process. The institution’s goal is stated as ensuring that regulators adopt a more balanced and accurate framework when evaluating Bitcoin.

Basel Rules Classify Bitcoin as a High-Risk Asset

Under the current Basel regulations, Bitcoin is considered a very high-risk asset on banks’ balance sheets. Within this framework, a 1250% risk weight is applied to Bitcoin.

This ratio requires banks to hold significantly higher capital when taking any position related to Bitcoin or providing services connected to this asset. Compared to traditional financial assets, this represents a very heavy capital requirement.

Critics argue that this approach creates an effect that could limit banks’ activities in the Bitcoin sector. High capital obligations can cause many financial institutions to avoid offering crypto asset services.

A Critical Process for the Banking Sector

The draft regulation prepared by the Fed is seen as an important part of the ongoing discussions regarding the position of digital assets within the global banking system. Policymakers in the US have long been debating how crypto assets should be integrated into the traditional financial system.

Industry representatives believe that the final decision could be decisive in whether banks expand their services related to Bitcoin. If the regulations maintain the current risk approach, many banks are expected to continue keeping their distance from the crypto sector.

Conversely, if a more balanced risk assessment model is adopted, it could open the door for traditional financial institutions to engage more actively with the Bitcoin ecosystem. Therefore, the Fed’s proposal regarding the Basel application is being closely monitored by both the banking sector and the crypto market.

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Cracks Reappear in the Banking Sector

Although regional banks strengthened their balance sheets following the 2023 turmoil, recent developments suggest that underlying issues persist. According to the Associated Press, several banks have reported significant losses due to bad loans made to commercial clients. These reports have reignited Wall Street’s concerns about the stability of regional banks.

The steep decline in Zions Bank and Western Alliance shares highlights that investor confidence has not fully recovered since 2023. The Kobeissi Letter noted that the U.S. banking system still stands “not on sound financial foundations but on government guarantees,” underlining the fragility of the current setup.

“Bitcoin Is Reading the Signals Right”

Strike CEO Jack Mallers interprets the renewed banking stress as validation of Bitcoin’s core thesis. Speaking on the social platform Primal, Mallers said, “Bitcoin is accurately smelling trouble right now.”

He argued that the U.S. will soon need to inject liquidity and print money to avoid a financial meltdown, stating, “Yields are falling, spreads widening, and banks are under stress. Bitcoin is doing its job — it senses the danger. When the printing starts, it’ll move first and outperform everything else.”

Bitcoin’s Short-Term Pain, Long-Term Potential

While these developments could eventually benefit Bitcoin, the short-term market reaction has been negative. On Friday, Bitcoin plunged to $103,850 — its lowest level in four months — before recovering slightly to around $107,000 on Saturday. The asset remains roughly 15% below its all-time high.

BitMEX co-founder Arthur Hayes commented, “BTC is on sale. If this regional banking wobble escalates into a full-blown crisis, expect a bailout similar to 2023 — and that could be a major buying opportunity for those with spare capital.”

These events once again underscore Bitcoin’s reputation as a leading indicator for financial stress — a digital asset that reacts before traditional markets catch on.

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The report highlights that crypto cardholders exhibit spending behavior similar to traditional bank card users but adopt online payments at a significantly faster rate. While the European Central Bank reports that only 21% of card payments in the eurozone are made online, CEX.IO users already conduct 40% of their transactions digitally.

Everyday Use of Crypto Cards on the Rise

CEX.IO data reveals that 59% of crypto card spending goes to groceries, and 19% is spent on restaurants and bars — both figures surpassing ECB benchmarks. The average transaction value for crypto cards stands at €23.7, compared to €33.6 for bank cards, indicating crypto cards are preferred for small, day-to-day purchases.

Alexandr Kerya, Vice President of Product Management at CEX.IO, commented: “Crypto users in Europe are not just experimenting with new tech — they’re showing us what a cashless future could actually look like.”

Stablecoins account for 73% of crypto card transactions, with the rest split between major cryptocurrencies like Bitcoin, Ethereum, Litecoin, and Solana — used across groceries, dining, and transport.

Similar Trends on Other Platforms

Other companies, including Oobit and Crypto.com, have also reported strong demand in Europe for crypto cards used for everyday essentials and online shopping.

Barclays Bans Credit Card Crypto Purchases

Despite growing adoption, Barclays recently announced a ban on crypto purchases via its Barclaycard credit cards, citing concerns over volatility and lack of consumer protections.

The bank emphasized that crypto transactions offer no recourse through the Financial Ombudsman Service or Compensation Schemes, leaving customers exposed to potential risks.

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“The current financial infrastructure is broken — it’s slow and expensive. It benefits only the ultra-rich. That’s exactly why I turned to crypto,” Trump stated. “If banks fail to acknowledge this shift, they won’t survive the next ten years.”

SWIFT Criticized as Outdated

Trump directed strong criticism at international money transfer mechanisms, especially the SWIFT network, labeling it as obsolete and inefficient. He highlighted how blockchain technology has already surpassed these legacy systems in terms of both speed and transparency.

“You can use a DeFi app today and transfer funds instantly, wallet to wallet, without excessive fees or delays,” Trump noted, underlining how decentralized finance tools are making traditional platforms irrelevant.

Crypto Gains Ground Despite Bank Resistance

While many global banks continue to show resistance toward digital assets, industry leaders believe 2025 could mark a turning point, as more governments — including the U.S. — adopt pro-crypto regulatory frameworks. This trend, according to experts, is expected to reshape the relationship between finance and technology.

Eric Trump’s Bullish Forecast: Bitcoin to Reach $1M

Back in December 2024, Trump predicted that Bitcoin would eventually reach the $1 million mark, claiming that institutional and governmental adoption would be a necessity rather than an option in the near future.

USD1: Trump-Backed Stablecoin Goes Live

Trump’s involvement in crypto goes beyond statements. In March 2025, the Trump family launched USD1, a stablecoin pegged 1:1 to the U.S. dollar. The asset is fully backed by short-term treasury bills, cash reserves, and dollar-based assets, according to its official documentation.

Built on BNB Chain, a blockchain originally developed by Binance, the coin’s launch sparked new controversy over alleged connections between the Trump family and the exchange. While both Donald Trump and former Binance CEO Changpeng Zhao denied such reports, Eric Trump’s recent comments are fueling renewed speculation.

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Regulations or Taxes: What Should Come First?

As regulatory efforts accelerate, many experts argue that banking access and stablecoin regulations should be clarified before tax reforms. Orbs General Counsel Mattan Erder stresses that securities laws and access to the banking system should be a higher priority. According to Erder, regulatory and banking barriers must first be removed to support industry growth, with tax reforms following afterward.

Meanwhile, the Trump administration is taking proactive steps toward digital assets. A March 7 executive order granted the U.S. government the authority to use seized crypto assets to establish a national Bitcoin reserve. This marks a significant shift in federal policy and offers insights into how the U.S. aims to position digital assets within the global financial system.

Crypto Companies Struggle with Banking Access

Despite the Trump administration’s crypto-friendly stance, industry leaders anticipate ongoing banking challenges until at least 2026. Custodia Bank CEO Caitlin Long points out that significant changes are unlikely until Trump appoints a new Federal Reserve official.

Additionally, U.S. banking regulators have reportedly pressured some financial institutions to halt crypto banking services, raising serious concerns within the industry. A lawsuit led by Coinbase in June 2024 revealed that several U.S. banks had been directed by regulators to suspend crypto-related services, underscoring the banking access barriers that still hinder crypto startups.

You May Also Find This Article Interesting: Is Listing Altcoins Leading Exchanges into an ‘Endless Loop’?

What Will Stablecoin Regulations Bring to the Crypto Sector?

Stablecoins are playing an increasingly crucial role in digital asset markets, making clear regulatory guidelines a top priority. David Pakman, managing partner at CoinFund, highlights that upcoming U.S. stablecoin regulations could ease the integration of blockchain-based payment systems into traditional finance. According to Pakman, banks and payment companies view stablecoin technology as a more transparent, cost-effective, and 24/7 accessible money transfer system.

In this context, the GENIUS Act, a proposed U.S. bill, is expected to set collateralization guidelines for stablecoin issuers and introduce strict anti-money laundering measures. If enacted, these regulations could provide a more robust legal framework for both the financial and crypto sectors.

Click Here for the Latest Breaking Crypto News.

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As the crypto market continues to grow rapidly, regulatory uncertainties and risks in the sector have also been rising. Powell mentioned that stablecoins and other digital assets could be more efficiently regulated within the framework of the traditional financial system, with banks taking on a larger role in the process.

You Might Be Interested In: Elon Musk Talks About the Name of a New Memecoin!

Can Banks Compete with Crypto?

The statement from Fed Chairman Powell indicates that banks could increasingly become involved in the crypto sector, performing various financial activities that are traditionally done in decentralized systems. Powell’s comments suggest that crypto regulations may increase, and banks might take on a bigger role in overseeing these activities. This would mean that banks could mitigate risks by performing certain crypto activities in a safer and more regulated environment.

Is a New Era for Crypto Starting?

Powell’s remarks are highlighting the possibility of further integration between traditional financial institutions and cryptocurrency. If banks take on a larger role in crypto services, the crypto market could experience increased institutional oversight and regulation, thus reducing the overall risks in the sector. Powell emphasized that it would be crucial for banks to take on more responsibility in managing crypto activities in order to ensure financial stability.

These developments in the crypto world may lead to banks becoming more involved in the sector, paving the way for a new era of crypto financial services under more regulation.

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The organization that manages Swift’s global network announced that it will test blockchain-based transactions, previously only tested in test environments, with real money and asset movements between different blockchain ledgers. This change will serve as a link for banks experimenting with blockchain technology across platforms.

Swift’s Head of Innovation Nick Kerigan said they want to avoid the technological fragmentation that occurs when banks develop their own blockchain infrastructures. “Our goal is to ensure that digital assets and digital currencies, regardless of the technology they are created with, work seamlessly with the existing financial system,” he said.

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Swift has been testing blockchain-based transactions to support central bank digital currencies (CBDCs) since 2021. This new step will see the first live testing of digital asset transactions on the Swift network. The trials will cover payment transactions and securities exchanges.

Banks that have previously participated in Swift’s blockchain trials include major banks such as Deutsche Bank, HSBC, NatWest Group, Santander and Sumitomo Mitsui Banking Corp. Swift emphasizes that as the financial community embraces new technologies such as blockchain and digital assets, it is imperative to incorporate these technologies into its own ecosystem.

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