Bank crypto exposure and custody
Latest change ·
First version, covering India, Singapore and Hong Kong.
Sources: info.gov.hk, mas.gov.sg, rbi.org.in
How regulators in India, Singapore and Hong Kong apply the Basel cryptoasset standard, and what banks may hold or custody
As of 30 September 2026, Hong Kong is the only one of the three markets applying the Basel cryptoasset standard, in force for banks since 1 January 2026. Singapore deferred it to 1 January 2027 or later, and in April 2026 proposed an interim treatment that lets bank-issued tokens on permissionless chains get the lower capital charge under issuer controls. India has not implemented the standard and has no framework for bank crypto exposure. The Basel Committee itself is reviewing parts of the standard, with an update due later in 2026.
Side by side
| India | Singapore | Hong Kong | |
|---|---|---|---|
| Basel cryptoasset standard | Not implemented | Deferred to 1 January 2027 or later | In force since 1 January 2026 |
| Instrument | None | MAS Notice 637 amendments, pending | Banking (Capital), (Disclosure) and (Exposure Limits) (Amendment) Rules 2025 |
| Interim treatment | None | Notify MAS; treatment aligned with the 2025 consultation | Not applicable |
| Tokens on permissionless chains | No rule | Group 1 possible under issuer controls, within caps (proposal in effect while MAS consults) | Classification under the Basel conditions; extra caution in custody |
| Bank custody standards | None | No bank-specific standard published | HKMA custody standards, updated May 2026 |
By market
India
India has no prudential rule for bank crypto exposure and has not announced plans to implement the Basel standard. The RBI’s April 2018 circular barring banks from dealing with crypto businesses was set aside by the Supreme Court in March 2020. In May 2021 the RBI told banks to stop citing it, and to continue customer due diligence under KYC, AML and foreign exchange rules when dealing with customers in virtual currencies.
The RBI’s public position discourages bank involvement. Deputy Governor T Rabi Sankar’s December 2025 speech set out risks from stablecoins to bank intermediation and monetary stability. Banks’ tokenisation work runs through RBI and SEBI pilots on permissioned ledgers (Wholesale settlement).
Singapore
MAS consulted in March 2025 on implementing the Basel standard in MAS Notice 637 from 1 January 2026. Its October 2025 response deferred implementation to 1 January 2027 or later, citing the risk of moving ahead of other jurisdictions and advances such as layer 2 safeguards for permissionless chains (para 2.5). Until then, banks must notify and engage MAS before taking on crypto exposure, and apply a treatment largely aligned with the consultation (para 2.6).
In April 2026 MAS proposed Group 1 treatment for tokens on permissionless blockchains that meet requirements on governance, technology, settlement finality and AML. Deeming provisions include issuer powers to freeze or correct transactions and whitelisting of holders. The treatment applies now, capped at 2% of Tier 1 capital for exposure and 5% for issuance at locally incorporated banks. Comments closed on 18 May 2026.
Hong Kong
The Hong Kong Monetary Authority (HKMA) implemented the Basel standard through amendment rules gazetted in July 2025, covering capital, disclosure and exposure limits for cryptoasset exposures from 1 January 2026, with a supervisory policy module on classifying cryptoassets.
For custody, the HKMA’s May 2026 guidance sets standards for banks holding crypto, tokenised securities and other tokenised assets for clients: segregation, key management, cold wallet controls and monitoring. It applies a risk-based approach by network type, and asks banks to “exercise extra caution” before relaxing controls for permissionless tokens on public permissionless networks. Banks also deal in crypto for clients under joint SFC and HKMA circulars.
For Ethereum
Under the Basel standard, a token on a permissionless chain fails the classification conditions and lands in Group 2, with a risk weight of up to 1,250%. Singapore’s April 2026 proposal is the first of the three markets to let a bank-issued token on Ethereum or an Ethereum layer 2 reach Group 1, provided the issuer can freeze, correct and whitelist. Ether itself has no issuer and stays in Group 2. Hong Kong’s custody guidance points in the same direction: permissioned tokens with access controls in the smart contract are the easier path to lighter custody treatment. See Regulated finance on public blockchains.
Open questions
- What the Basel Committee’s expedited targeted review changes, and whether it covers permissionless chains.
- Whether MAS keeps the exposure and issuance caps when it finalises the rules.
- Whether Hong Kong adjusts its implementation after the Basel review.
Next milestones
- Later in 2026: Basel Committee update on its targeted review.
- 1 January 2027 at the earliest: Basel cryptoasset standard in force in Singapore.
- Pending: MAS response to the April 2026 consultation on permissionless blockchains.