ChainCatcher report: According to market sources, Michelle Bowman, Vice Chair for Supervision at the Federal Reserve, stated that U.S. regulators will propose rules to implement the final phase of Basel III within the coming weeks, with an expected release during the week of March 17–21, followed by a 90-day public comment period. The proposal is being developed in coordination between the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation. Under the global crypto framework finalized by the Basel Committee in 2022, Bitcoin is classified as a Category 2b asset—deemed difficult to hedge and inherently volatile—with a risk weight of 1,250%. This means that a bank with a $100 million exposure to Bitcoin would be required to treat it as $1.25 billion in risk-weighted assets and hold approximately $100 million in capital against it. Compared to cash, gold, and U.S. Treasuries, which carry zero risk weights, and corporate loans, which range from 20% to 100%, Bitcoin’s capital treatment is exceptionally stringent. Industry groups have criticized the framework for misclassifying Bitcoin and preventing banks from offering related services.
Fed to Propose Basel III Rules for Crypto, Bitcoin Assigned 1250% Risk Weight
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Summary
Michelle Bowman, Vice Chair for Supervision at the U.S. Federal Reserve, said regulators will propose Basel III rules next week, likely between March 17 and 21. In coordination with the OCC and FDIC, the rules assign Bitcoin a 1,250% risk weight under the 2022 Basel crypto guidelines. This treatment, designed to address risk-on assets and CFT concerns, means a $100 million Bitcoin position would be counted as $1.25 billion in risk-weighted assets, requiring banks to hold approximately $100 million in capital. The framework has faced industry criticism for misclassifying Bitcoin and potentially restricting banks’ participation in crypto services.
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