No bank rulebook has a category called "AI crypto coin." Under the Basel Committee's cryptoasset standard, which took effect in the Basel Framework on January 1, 2026, a bank sorts every token by how it is built and who stands behind it, and any token that is not a tokenized traditional asset or a qualifying stabilized coin lands in Group 2, where the harshest case carries a 1,250 percent risk weight. Canada's banking supervisor adopted the standard through guidelines that apply from fiscal Q1 2026.
Key takeaways
- The Basel standard (SCO60) has four groups: 1a, 1b, 2a, and 2b. An "AI" label is not a test for any of them.
- Group 1 needs legal enforceability, redemption within five calendar days, mitigated network risk, and regulated operators. Everything else is Group 2.
- Group 2b tokens carry a 1,250 percent risk weight, and total Group 2 exposure should generally stay at or below one percent of Tier 1 capital and must not exceed two percent.
- The Basel Committee agreed on November 19, 2025 to expedite a review of targeted elements, and on October 1, 2026 it said an update is expected by the end of the year.
- This is a capital rule for banks. It says nothing about whether any token is a sound or sensible holding.
Why the label does not matter to a bank supervisor
Marketing pages describe some tokens as "AI coins," meaning projects that claim to pay for computing power, data, or machine learning services on a blockchain. Bank capital rules never use that vocabulary. They ask what claim the token represents, whether it can be redeemed, whether the rights are enforceable, and whether the network and the firms around it are regulated. The Basel Framework chapter on cryptoasset exposures (SCO60) states four classification conditions, and a bank must check them on an ongoing basis, with supervisors free to override the bank's classification.
The first condition is that the token is either a tokenized traditional asset or has a stabilization mechanism that is effective at all times. Mechanisms that reference other cryptoassets, or that adjust supply through a protocol, fail that condition. The second requires enforceable rights, settlement finality, and redemption within five calendar days of a request. The third requires that material risks from the underlying network are mitigated, with transactions and participants traceable. The fourth requires that entities handling redemption, transfer, storage, settlement, or reserves are regulated and supervised, or meet appropriate risk management standards, and have a disclosed governance framework. None of the four refers to what a token is used for.
The four groups in one table
The table condenses the standard's structure. Capital figures are the headline treatments only; the framework text holds the full calculations, and a bank's regulator decides how they apply to a specific balance sheet.
| Group | What it contains | Headline capital treatment |
|---|---|---|
| 1a | Tokenized traditional assets that meet all four conditions | Banking book exposures generally follow the rules for the non-tokenized asset |
| 1b | Cryptoassets with effective stabilization mechanisms that meet all four conditions | Credit risk of the reference asset is capitalized as if held directly |
| 2a | Cryptoassets that fail the conditions but meet the hedging recognition criteria | Position risk of 100 percent of the net position |
| 2b | All other cryptoassets | 1,250 percent risk weight on the larger of aggregate long or short positions |
The 1,250 percent figure is set so that required capital is at least equal to the exposure itself. The framework applies it to the larger of the aggregate long or aggregate short positions in each Group 2b asset, without netting one against the other.
The exposure limit, with an illustrative example
Group 2 carries a second restraint. The standard says a bank's exposure to Group 2 cryptoassets, direct and indirect, should not generally exceed one percent of Tier 1 capital and must not exceed two percent. Breaches of the one percent level must be reported to the supervisor immediately and corrected rapidly, and the excess is treated under the Group 2b rules until the bank complies. Above two percent, all Group 2 exposures fall under Group 2b treatment.
An illustrative example, with invented numbers: a bank with CAD 10 billion in Tier 1 capital would have a one percent soft ceiling of CAD 100 million and a two percent hard ceiling of CAD 200 million. The figures show how the limit scales and are not drawn from any real institution.
What Canada did with the standard
The Office of the Superintendent of Financial Institutions (OSFI) published a letter on February 20, 2025 announcing two guidelines on the capital and liquidity treatment of crypto-asset exposures, one for deposit-taking institutions and one for insurers. They incorporate the Basel standards as last updated in November 2024, and they take effect in fiscal Q1 2026: November 1, 2025 for institutions with an October 31 year-end and January 1, 2026 for those with a December 31 year-end. They replace OSFI's earlier interim advisory. A OSFI letter on the guidelines lists the institution types covered, which include banks, foreign bank branches, insurers, and trust and loan companies.
A Basel standard binds no bank by itself, because each jurisdiction adopts it through its own rules. How other countries, including the United States, have applied it was not checked against primary agency documents for this article, so no claim is made about them.
A rule under review
On November 19, 2025 the Basel Committee agreed to expedite a review of targeted elements of the standard, citing recent cryptoasset market developments. In a December 10, 2025 speech, its Secretary General listed the areas as permissionless blockchains, Group 1b tokens received as collateral, the Group 2a hedging criteria, and the calibration of the Group 2 exposure limits, with the emergence of stablecoin regimes to be considered as well. In the same speech he said no currently issued stablecoin would meet the Group 1 conditions. The Committee noted progress in February 2026 and May 2026 and, after its September 28 and 29, 2026 meeting, said it expects to provide an update by the end of the year. Final changes, if any, were not published as of October 24, 2026.
Where AI fits, and where it does not
Artificial intelligence and tokens meet in two separate places. Some projects use "AI" in a name or pitch, and the capital rule ignores it. Separately, banks use machine learning for fraud screening, credit decisions, and monitoring, and those models fall under general model risk expectations rather than under the cryptoasset chapter. No evidence was found that a token tied to an AI service receives a different capital treatment from any other Group 2 token, and the Basel text reviewed here supplies no such distinction.
This article gives general information about prudential regulation. It is not investment, legal, or tax advice, it does not say which tokens, platforms, or products are sound or unsound, and it makes no prediction about prices or returns. Anyone with a decision to make should consult a qualified professional and the primary documents listed below.
FAQ
Can a bank hold a token that is marketed as an AI coin?
The standard does not ban holdings. It sets how much capital a bank must hold against them and caps total Group 2 exposure. Whether a particular bank holds any is a decision for that bank and its supervisor.
What does a 1,250 percent risk weight mean?
It is the risk weight the framework applies to Group 2b cryptoassets. It is set so that required capital is at least equal to the exposure, and it is calculated on the larger of the aggregate long or aggregate short positions.
Does the Basel standard apply directly to Canadian banks?
Indirectly. OSFI's guidelines incorporate it for federally regulated institutions and take effect in fiscal Q1 2026, depending on the institution's year-end.
Are the rules final?
They are in force, but the Basel Committee is reviewing targeted elements, and an update was promised by the end of 2026. Changes would need national adoption to reach any bank.
Related reading
- What counts as an AI crypto project
- How crypto ETF structures differ
- AI and the future of work
- A guide to the TOKEN2049 conference
More in AI in finance.
Last verified: October 2026
Sources
- Basel Framework, SCO60 Cryptoasset exposures (in force January 1, 2026), Basel Committee on Banking Supervision, Bank for International Settlements, 2024
- Capital and Liquidity Treatment of Crypto-asset Exposures Guidelines, Letter, OSFI, February 20, 2025
- Basel Committee media release, November 19, 2025, Bank for International Settlements
- Basel Committee media releases of February 25, 2026, May 20, 2026, and October 1, 2026, Bank for International Settlements
- Neil Esho, "Just get it done," speech, December 10, 2025, Bank for International Settlements