The Bitcoin Policy Institute said it plans to review and respond to an upcoming proposal from the Federal Reserve that could shape how U.S. banks treat Bitcoin under international banking standards.
Summary
- The Bitcoin Policy Institute plans to review and comment on an upcoming Federal Reserve proposal on Basel rules.
- The proposal will open a 90-day public comment period for industry feedback.
- Current Basel guidance assigns Bitcoin a 1250% risk weighting, discouraging banks from holding or servicing the asset.
Bitcoin Policy Institute to weigh in as Fed prepares Basel proposal for banks
According to Conner Brown, the Federal Reserve is expected to issue a public proposal next week outlining how American banks should implement risk-weighting guidance under the Basel Accords.
The proposal will apply to the largest U.S. banks and will open a 90-day public comment period, allowing industry participants, policy groups and financial institutions to submit feedback before the rules are finalized.
Brown said the institute intends to participate in the process to ensure regulators “get Bitcoin’s treatment right.”
Under the Basel framework, Bitcoin (BTC) is currently assigned a 1250% risk weighting, which effectively treats the cryptocurrency as a highly risky asset on bank balance sheets. Such a requirement forces banks to hold significantly higher levels of capital against Bitcoin exposure compared with most traditional assets.
Critics argue that this classification makes it difficult for banks to provide financial services to Bitcoin users and companies, as the capital requirements can discourage institutions from interacting with the sector.
“The Federal Reserve just announced that next week they will issue a public proposal for how banks should implement Basel risk weighting guidance,” Brown said in a post on X, adding that the think tank would review the document and submit a formal public comment.
The upcoming consultation comes as policymakers in the United States continue to debate how digital assets should fit within 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 engagement with Bitcoin-related services in the future.