Caixin: Singapore Plans to Enhance Bank Capital Rules for Crypto Assets

April 22 — Singapore’s Monetary Authority (MAS) has released a consultation paper proposing a more crypto-friendly regulatory capital framework for assets on permissionless (public) blockchains, ahead of implementing the Basel Committee’s crypto asset capital requirements, per Caixin. The current Basel framework is widely viewed as overly strict in classifying public blockchain assets, a stance that could hinder banking innovation. Basel splits crypto assets into two groups: Group 1 includes tokenized traditional assets and stablecoins (with lower capital requirements), while Group 2 covers assets failing to meet Group 1 criteria. MAS aims to avoid a one-size-fits-all classification of permissionless blockchain crypto assets as Group 2. Instead, it will allow these assets to qualify for Group 1 status (lower risk weights, more lenient prudential rules) if they meet a set of foundational principles — a move to achieve regulatory technology neutrality. For Singapore-incorporated banks, risk exposure to Group 1-qualified permissionless blockchain assets must not exceed 2% of Tier 1 capital. If such assets are issued as bank liabilities, the issuance scale cannot exceed 5% of Tier 1 capital.