Stablecoins issued on permissionless blockchains, such as Tether’s USDT and Circle’s USDC, could face significant regulatory challenges following new guidance from the Bank for International Settlements (BIS). The BIS has tightened criteria, favoring permissioned stablecoins and imposing stricter rules on those issued on permissionless blockchains.
BIS Targets Permissionless Stablecoins
On July 17, the Basel Committee on Banking Supervision released its final disclosure report on banks’ crypto-asset exposure. Banks are now required to provide detailed reports on their crypto activities and maintain specific liquidity requirements to ensure stability.
In addition, the BIS has amended its crypto asset standards, introducing stricter criteria for stablecoins to receive preferential “Group 1b” regulatory treatment. This change, effective from January 1, 2026, implies severe restrictions on permissionless stablecoins such as USDT and USDC. This announcement coincided with the Hong Kong Monetary Authority’s release of consultation papers on a licensing regime for stablecoin issuers.
Industry Reactions
Caitlin Long, CEO of Custodian Bank, criticized the BIS decision, noting that it excludes stablecoins on permissionless blockchains from bank use while favoring permissioned stablecoins. Long expressed her disappointment, suggesting that the United States might disregard this development, saying, “The US will almost certainly just ignore this. It’s a shame tho–BIS was leading the US on crypto but just went backward.”
At Coinbase’s recent State of Crypto event, BlackRock’s Head of Digital Assets argued that public blockchains are superior to private ones. Despite this, the BIS’s new guidance encourages banks to adopt permissioned stablecoins like JPMCoin. Additionally, State Street is reportedly planning to launch a stablecoin, further challenging permissionless stablecoins like USDT.
In a recent tweet, Fox Business reporter Eleanor Terret noted, “I’m told the initial proposal would have included USDC and others in that group but the final guidance changed to exclude all stablecoins issued on permissionless blockchains.”
The BIS’s new stance marks a significant shift in the regulatory landscape for stablecoins, favoring those issued on permissioned blockchains and putting pressure on popular permissionless stablecoins.
Related topics:
MicroStrategy Stock Surges 15% Amid Bitcoin Rally
Galaxy CEO Novogratz Applauds China’s Potential Bitcoin Policy Shift
Former FTX Executive Alleges Silvergate Bank’s Awareness of Suspicious Transactions
