The European Union (EU) on Tuesday secured a political deal on new bank-capital legislation, after lawmakers sought “prohibitive” rules to keep unbacked crypto out of the traditional financial system.

The deal was announced in a tweet from the European Parliament’s Economic and Monetary Affairs committee, after a meeting among representatives of the European Parliament, national governments and the European Commission, which had first proposed the new rules back in 2021.

The political deal, which also introduces sweeping and controversial changes to how banks assess the risk of corporate and home loans, must now be voted on by member states in the EU’s Council and by lawmakers to become legislation, a process that can in practice take many months.

International standard-setters at the Basel Committee on Banking Supervision are currently finalizing what a global crypto banking rulebook would look like – but details already out suggest they’ll take a tough line, assigning the maximum possible 1,250% risk weight to free-floating cryptocurrencies.

That would mean banks have to issue a euro of capital for each euro of bitcoin (BTC) or ether (ETH) they hold, giving them little incentive to buy into the market. EU parliamentarians appear keen to see those measures take effect sooner rather than later.

Under a compromise privately proposed by the European Commission late during the talks, that strict stance would be somewhat softened for regulated stablecoins – which appears to have found favor among EU governments, who must also agree before the bill becomes law.