Digital Assets
Stablecoins should be treated as T-bills, say banking trade bodies
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August 22, 2025
The Basel Committee is being urged to treat “regulated stablecoins” as equivalent to their underlying assets — specifically US Treasury bills — and therefore acceptable as collateral by banking trade groups. The call came from eight global trade bodies in a joint letter published on August 19.
US Treasuries are generally considered nearly free of default risk because they are fully backed by the federal government. The GENIUS Act also includes short-term Treasury bills as eligible liquid, low-risk reserves for stablecoins.
In the letter, eight industry representative groups (see box) asked the committee to reconsider its treatment of regulated stablecoins, making them eligible as financial collateral under SCO60.29 of the Basel framework. Currently, SCO60.39 explicitly states that group 1b assets — which include stablecoins — are not eligible as collateral. The group said such exclusion is inconsistent with the “same activity, same risk, same regulatory outcome” principle.
They added: “Regulated stablecoins have different risk profiles from unregulated stablecoins, and the Basel framework should reflect these distinctions.
“The value is that of the pegged asset and should factor in the collateral recognition. In that context, there is no policy reason that regulated stablecoins should be treated less favourably than other eligible financial collateral.”
The trade bodies who signed the letter:
- Bank Policy Institute (BPI); Futures Industry Association (FIA); Financial Services Forum (FSF); Global Blockchain Business Council (GBBC); Global Digital Finance (GDF), Global Financial Markets Association (GFMA); Institute of International Finance (IIF); International Swaps and Derivatives Association (ISDA)
In July, JPMorgan Chase CEO Jamie Dimon expressed an interest in exploring cryptocurrencies as collateral, three days after the GENIUS Act stablecoin legislation became law in the US, according to the Financial Times.
However, a May paper by the Bank for International Settlements (BIS) noted that stablecoin flows could have an impact on Treasury market pricing, through both direct and indirect demand for Treasuries, by reducing the supply available in the market. Stablecoins could also create “signalling effects”, as large inflows may signal the institutional risk appetite — or lack thereof — which investors then price into markets.
“Stablecoins have already established themselves as significant players in Treasury markets, with measurable and significant effects on short-term yields. Their growth blurs the lines between cryptocurrency and traditional finance, demanding regulatory attention to reserve practices,” said the BIS.
The paper called for further research into stablecoins’ cross-border spillovers and links to money market funds, especially during liquidity crises.
Safety and soundness
In the letter, the banking trade bodies also asked the Basel Committee to temporarily pause the implementation of the cryptoasset exposures chapter (SCO60), saying the framework discourages “safe and sound” participation from banks and other regulated crypto players such as “digital natives, fintechs and non-bank financial intermediaries”.
The trade bodies claimed that the crypto sector currently operates largely outside the banking system — not due to its risk but because of the design of the prudential regulatory framework. By allowing crypto activity inside the banking sector, the crypto sector could focus more on “management of consumer protection, cybersecurity and other operational risks”, the groups said in their letter.
Central bank warning
The European Central Bank (ECB) previously warned that linking stablecoins with traditional financial institutions (TradFi) could pose risks to financial stability.
In a blog, Jürgen Schaaf, adviser to the senior management of market infrastructure and payments at the ECB, said: “[Stablecoins] are starting to come out of their niche and become more entangled with traditional financial institutions — for example, through custody arrangements and derivative exposures — creating potential threats to financial stability.
“A disorderly collapse could reverberate across the financial system, and the risk of contagion is a growing concern for central banks.”