Potential Regulatory Shift Could Enable Banks to Hold XRP
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Dec 25 2025- Regulatory Barrier Analysis: Under Basel III rules, XRP is classified as a high-risk crypto asset with a punitive 1,250% capital requirement, forcing banks to reserve $12.50 for every $1 of XRP exposure, which has led to institutional hesitation in holding it.
- Capital Efficiency Issues: The high risk weighting has compelled banks to rely on off-balance-sheet structures or avoid holding XRP altogether, despite its relevance in cross-border payments, limiting institutional participation due to regulatory burdens.
- Potential Turning Point: As legal and regulatory clarity around XRP improves, there may be an opportunity for reclassification that could lower its risk weight, enabling banks to hold and use XRP directly, fundamentally changing their interaction with digital assets.
- Market Reaction Expectations: Stern Drew notes that markets tend to front-run regulatory changes, and if XRP's regulatory classification shifts, institutional demand could surge rapidly, potentially positioning it as a Tier-1 digital asset for global institutions.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
