According to Cointelegraph, the Bitcoin Policy Institute (BPI), a Bitcoin advocacy organization, announced it will submit public comments on the Federal Reserve’s upcoming proposal to implement the Basel framework, advocating for a revision in how BTC is treated in terms of risk weightings within the banking regulatory system. Conner Brown, Executive Director of BPI, stated that under the Basel framework, BTC is classified as a high-risk asset with a 1,250% risk weight—higher than nearly all other asset classes—and described this classification as "the most stringent." In contrast, cash, physical gold, and government bonds all carry a 0% risk weight. A 1,250% capital requirement means banks holding BTC must hold compliant collateral at a 1:1 ratio, significantly increasing the cost of holding this asset and limiting banks’ ability to provide financial services to BTC-related businesses.
Bitcoin Policy Institute Submits Comments to the Fed on the Basel Framework’s Risk Weight for BTC
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Summary
The Bitcoin Policy Institute (BPI) has announced plans to submit public comments to the Federal Reserve regarding the Basel framework’s risk weight for Bitcoin. BPI Executive Director Conner Brown noted that Bitcoin is assigned a 1,250% risk weight—the highest of any asset class—while cash and government bonds are assigned 0%. This stringent capital requirement under the regulatory framework compels banks to hold 1:1 collateral for BTC, increasing costs and impeding services. BPI argues that the current classification misrepresents Bitcoin’s nature as a risk-on asset.
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