Basel Crypto Rules: Why Banks Like JPMorgan Can Hold So Little Crypto

You often hear that the big banks are quietly loading up on crypto. The video looks at the international rule that decides how much crypto a bank can actually own, and the number it produces for the largest bank in the US: about $3 billion, for all of its higher-risk crypto combined.

The video’s argument cuts both ways. Banks are capped. But institutional accumulation is still happening, just not on bank balance sheets.

What is the Basel crypto rule?

It is a chapter of the Basel Committee’s international banking standards called SCO60, “Crypto-asset exposures.” The Basel Committee is where the world’s bank regulators agree on what banks may do. The chapter came into force on January 1, 2026, so it isn’t a proposal.

SCO60 sorts every crypto asset into two groups (paragraph 60.6):

• Group 1: assets that meet the classification conditions. These are tokenized versions of things already inside the regulated system, plus stablecoins that pass a redemption test.
• Group 2: everything that fails those conditions.

Bitcoin and XRP are in Group 2. The video stresses this isn’t a judgment on the technology. It is about what backs an asset and who is obliged to redeem it.

Why is crypto so expensive for banks to hold?

Because of the risk weight. Paragraph 60.86 says Group 2b crypto assets must be assigned a 1,250% risk weight.

Here’s what that means in money. A bank holds capital worth 8% of its risk-weighted assets. And 8% of 1,250% is 100%. So:

Holding	How the bank funds it
Group 2b crypto (e.g. XRP, Bitcoin)	100% from the bank’s own capital
A typical mortgage	a small fraction from capital

A bank buying XRP has to fund every dollar with its own equity, not deposits or borrowed money. The video calls it the most expensive way to own anything in the rulebook.

Is there a hard cap on bank crypto holdings?

Yes. Expensive is one thing; a ceiling is another.

1. Paragraph 60.118: a bank’s aggregate Group 2 crypto exposures must not exceed 1% of its Tier 1 capital.
2. Paragraph 60.119: a harder outer limit of 2%.

Tier 1 capital is a bank’s core equity, and banks publish it every quarter. However much a bank might want, its crypto exposure stops at roughly 1% of its own equity.

How much crypto can JPMorgan hold?

About $3 billion, by the video’s math. In its first-quarter 2026 results, JPMorgan reported common equity Tier 1 capital of $291 billion. Tier 1 capital runs slightly above that, and 1% comes to about $3 billion.

That is the allowance for everything in Group 2 combined, not just XRP. The video notes XRP has been worth more than $50 billion all year. If JPMorgan spent its entire allowance on XRP alone, it would own a low single-digit percentage of it and have no room left for Bitcoin or anything else.

Then what are banks’ crypto teams for?

Activities that never touch the cap. Holding a customer’s coins in custody is not the bank owning them. Servicing a fund, clearing trades and running settlement aren’t ownership either. A bank can build a full crypto business while spending only a sliver of its 1% allowance.

That is how the video squares two claims people argue about:

• Institutions are accumulating. The buyers of crypto funds are asset managers, pensions, family offices and individuals. SCO60 is a bank capital rule, and none of them are banks, so no 1% ceiling applies to them.
• Banks are capped at about 1%. When a bank runs or sells an ETF, the coins belong to the fund’s holders, not the bank.

People have been watching the wrong balance sheet. Checking a bank’s holdings and finding almost nothing doesn’t mean the demand is fake or hidden; the rulebook said the position would never be there. The host’s own view is that this is encouraging, since markets have moved without bank buying, but that is opinion, not something the rule says.

What the rule doesn’t say

The video is explicit about the limits of its argument:

• Basel is a standard, not a law. It binds a bank only once a national regulator writes it into its own rules, on its own schedule and with its own edits. The version a US bank follows is set in Washington.
• A capital rule isn’t a valuation. A 1,250% weight prices risk for a bank. It is not a verdict on what an asset is worth.
• A cap on owning is not a cap on doing. Custody, clearing and settlement are wide open.

What is not in dispute are the numbers in the text: the 1,250% weight, the 1% cap and the 2% outer limit, each with a paragraph number.

Check your own bank

The video suggests a two-minute exercise:

1. Find your bank’s latest quarterly results.
2. Look up its Tier 1 capital.
3. Take 1% of it. That is roughly the most Group 2 crypto your bank could own under the Basel standard.

To verify the source yourself, open the SCO60 chapter and read paragraphs 60.86, 60.118 and 60.119. The next thing to watch is how US regulators write the standard into their own rules, since the version they adopt is the one American banks actually follow.