The new Basel capital requirements, effective from January 2026, can be simply put: if a bank holds 1 dollar of Bitcoin, it must set aside 1 dollar of capital. This 1250% risk weight is essentially telling you 'Want to trade coins? First, prepare an equivalent principal as a deposit; if you make enough to cover fees, but lose, you’ll face serious losses.'
A friend working in compliance at HSBC sent a message complaining: 'I just suggested to my boss last week about ‘should we layout ETH custody + trading’, and now the plan has been fed directly into the shredder. According to these rules, if a bank holds 100 million U in Bitcoin, it must set aside 100 million U in capital — this isn’t business; it’s acting as a ‘risk guarantor’ for crypto assets!'
What's even harsher is that even previously considered 'stable' varieties have been completely swept away:
Mainstream stablecoins like USDT and USDC, as long as they are issued on Ethereum, are directly categorized as 'high-risk'. The reason is simple: public chains are permissionless, anyone can transfer funds, and banks cannot fully control the risks. Want to hold onto the stablecoins? First, check if your capital is enough to fill this gap.
Even RWA (real-world asset tokenization) hasn’t been spared. Previously, banks were hot on 'tokenized bonds', but now that the new regulations have come out, as long as it is in crypto form, regardless of whether it is backed by real estate or government bonds, it must be considered high risk.
Systemically important banks are even worse off, with a '2% red line' hanging over them — the crypto assets they hold cannot exceed 2% of their tier 1 capital. For example, if a bank's tier 1 capital is 100 billion, it can hold at most 2 billion in crypto assets; exceeding even 100 million means that even the compliant portion will be calculated at exorbitant risk levels. This is not a limitation; it directly seals off the door to 'large holdings'.
However, the old hands quickly discovered a 'backdoor': custody services do not require paying this unjustified fee. As long as customer crypto assets are placed in a 'segregated safe', not mixed with the bank's own assets, the risk weight becomes zero. A brother working in private banking told me: 'This clearly means letting banks act as 'security guards' rather than 'traders' — helping clients manage coins can earn custody fees, but if they want to trade themselves? They should prepare their own coffins first.'
What's even more extreme is that Hong Kong has also pulled government-issued tokenized bonds into the regulatory circle. The original Basel rules only mentioned 'private crypto assets', but Hong Kong has directly removed the word 'private', meaning 'regardless of whether public or private, any involvement with crypto must comply with regulations.' This move has effectively closed off any loopholes for those trying to exploit 'government endorsement.'
Discussions in the banking circle have exploded in private these past few days:
The attitude towards public chain assets (especially ETH and BTC) has shifted from 'watchful waiting' to 'keeping a distance'. Some foreign banks have already notified: 'Unless there is strong demand from clients, we will no longer actively recommend any crypto products on public chains.'
Permissioned chain assets have suddenly become hot commodities. After all, permissioned chains can control access and traceability, resulting in much lower risk weights. There are reports that several banks are now connecting with local permissioned chain projects in Hong Kong, intending to migrate tokenized assets onto these platforms.
In simple terms, the new regulations draw a line for banks: if they want to earn money from crypto, they can, but they must earn it from within the 'safe zone' — acting as the 'security guard' for custody and steadily collecting service fees; if they want to become 'traders' in the market? They should first ask if their capital is sufficient to burn.
Insiders are all guessing that, as a result of this wave, stablecoins on Ethereum and RWA may be slowly 'marginalized' by banks, while those permissioned chain assets that can be closely monitored by regulators will likely see a wave of interest from bank funds.
For us ordinary users, the threshold for buying crypto assets through Hong Kong banks may be higher in the future — either go through a custody channel (with a spike in fees), or only find compliant non-bank institutions. But the benefit is that the crypto assets purchased through bank channels will be screened for security more rigorously.
Want to know which projects will benefit from this? Follow me; tomorrow I’ll dissect 'potential assets on the Hong Kong permissioned chain', as it's better to position yourself in advance than to scramble at the last minute. After all, the direction of policies has always been a signal for wealth transfer.
