The Bitcoin Policy Initiative (BPI) will submit public comments to the Federal Reserve regarding the risk weight provisions for BTC under the Basel framework
The btc-42">Bitcoin Policy Institute (BPI) announced that it will submit public comments on the Federal Reserve's upcoming proposal for the Basel framework implementation, advocating for changes to the risk weight treatment of BTC within the banking regulatory system.
BPI Executive Director Conner Brown stated that BTC is classified as a high-risk asset under the Basel framework, subject to a 1,250% risk weight, higher than almost all other asset classes, and is characterized as "the most stringent classification." In contrast, the risk weights for cash, physical gold, and government bonds are all 0%. The 1,250% capital requirement means that banks must hold BTC with a 1:1 ratio of compliant collateral, significantly increasing the cost for banks to hold this asset and limiting their ability to provide financial services to BTC-related businesses.
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