The Bitcoin Policy Institute said it plans to review and respond to an upcoming Federal Reserve proposal that could define the relationship of U.S. banks with Bitcoin in accordance with international banking standards.
Conclusion
- The Bitcoin Policy Institute plans to review and comment on the Federal Reserve’s upcoming proposal for Basel rules.
- The proposal opens a 90-day public comment period for industry feedback.
- The current Basel guidelines assign a 1,250% risk weight to Bitcoin, which prevents banks from holding or servicing the asset.
The Wikipedia Policy Institute weighs in as the Fed prepares a Basel proposal for banks
According to Conner Brown, the Federal Reserve is expected to release a public proposal next week outlining how US banks should implement risk-weighting guidelines under the Basel Accord.
The proposal would apply to the largest U.S. banks and opens a 90-day public comment period that allows industry participants, policy groups and financial institutions to provide feedback before the rules are finalized.
Brown said the institute plans to participate in the process to ensure regulators “treat Bitcoin the right way.”
In the Basel framework, Bitcoin (BTC) is currently assigned a weight of 1250%, which effectively treats the cryptocurrency as a very risky asset on the bank’s balance sheet. Such requirements force banks to maintain a higher level of capital against Bitcoin exposure than most traditional assets.
Critics argue that this classification makes it difficult for banks to provide financial services to bitcoin users and companies, as capital requirements may deter institutions from working with the sector.
“The Federal Reserve just announced that next week they will make a public proposal on how banks should implement the Basel weighting guidelines,” Brown said in a post on X, adding that the think tank will review the document and provide a formal public comment.
The upcoming consultation comes as policymakers in the United States continue to debate how digital assets should fit into the global banking regulatory framework.
Industry advocates say the outcome of the Federal Reserve’s proposal could play a key role in determining whether traditional financial institutions expand or limit their involvement with Bitcoin-related services in the future.
