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  • 🇺🇸 Basel’s 1,250% crypto rule faces a 2026 rethink

🇺🇸 Basel’s 1,250% crypto rule faces a 2026 rethink

PLUS: The controversial banking rule that treats crypto as ultra-risky heads toward review, XRP activity surges despite ecosystem doubts, prediction markets price in U.S. political drama, Germany tightens crypto tax oversight, and turmoil continues inside Elon Musk’s xAI.

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Cryptopolitan News
March 16, 2026 • Estimated Reading Time: 7 minutes

🏦 Basel 1,250% crypto rule pushes back before review in 2026

The Basel Committee on Banking Supervision has implemented rules that mandate banks to apply a risk weight of 1,250% for all cryptos, including Bitcoin. The rule was put in place after the last financial crisis to ensure banks have enough capital when handling risky assets.

But supporters of crypto say the rule goes too far and essentially prevents banks from playing a meaningful part in the crypto market.

A quick explainer: What is the 1,250% rule?

In short, the rule treats crypto as extremely expensive for banks to hold.

  • Banks required to maintain capital equal to 100% of their crypto exposure

  • So, for every $100 a bank has in Bitcoin, it must also have $100 held in reserve

  • For most banks, that means crypto is not worth holding at all

For this reason, banks tend not to hold Bitcoin on their balance sheets or provide large-scale crypto services.

Why the rule is under fire

The Bitcoin Policy Institute and other industry groups argue that the rule unfairly marks bitcoin as a “toxic” asset.

Managing Director Conner Brown writes that the rule puts heavier capital requirements on Bitcoin than it does on most traditional assets, despite the fact that Bitcoin is very liquid and has no counterparty risk.

The rule has been critical of even as it creates barriers to crypto companies wishing access to traditional banking services.

What could change in 2026

Regulators are beginning to study the global banking framework, setting up a pitched battle.

A plan is expected soon from the U.S. Federal Reserve detailing how the Basel rules will apply in the United States. After that proposal is released, a 90-day public comment period will give industry groups the chance to provide feedback.

Some analysts say that even a slight reduction in the risk weight would facilitate bank engagement with crypto markets.

What this means in relation to crypto adoption

Although the debate may sound technical, it is a big deal for industry.

If the rule were to change, banks may be able to:

  • have Bitcoin on their balance sheets

  • provide additional crypto custody and lending services

  • institutional access to digital assets

Unless something changes, traditional banks could so far sit on the sidelines of the crypto economy and leave most of the activity to crypto-native companies.

POLL: Should banks be allowed to hold Bitcoin like other financial assets?

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📊 Market Watch

1️⃣ XRP activity is through the roof, but skepticism lingers

The XRP Ledger has suddenly become quite active. Daily transactions have surged to about 3 million, nearly three times more than last year.

Part of the growth comes from tokenized assets and new trading pools constructed on-top of the network. But activity so far still is only an illusion — there’s a huge gap between such activity and real value locked in the ecosystem.

Which is why some investors are putting a simple question: if the network of XRP is this active, why isn’t the larger XRP ecosystem growing at precisely the same pace?

2️⃣ Prediction markets wager on increasing political drama

Prediction markets are beginning to account for political uncertainty in the U.S.

On betting sites such as Polymarket, traders are already wagering that Donald Trump might be impeached by the end of 2026.

The odds remain slim, but the heightened activity indicates an increasing willingness among traders to use prediction markets to gauge political risk and its potential economic impact.

3️⃣ Germany is tightening crypto tax rules

Germany is making it harder for crypto investors to hide profits.

Under new EU rules, crypto exchanges will now have to share user transaction data with tax authorities. This means governments will have a much clearer view of who is trading and how much they are making.

At the same time, tax offices are using blockchain tracking tools to identify undeclared gains. For crypto investors, the message is simple: tax authorities are paying much closer attention now.

 🐥 Top tweets

 🤔 Did you know?

Only 2 of the 11 co-founders who started xAI with Elon Musk in 2023 are still at the company.

Several founders have left in recent months as Musk admitted the AI startup “was not built right the first time” and is now being rebuilt from scratch.

This comes just weeks after Musk merged xAI with SpaceX in a deal he valued at $1.25 trillion, while SpaceX itself prepares for what could become one of the biggest IPOs ever.

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