TechFlow News, March 13: According to a Cointelegraph report, the Bitcoin advocacy organization Bitcoin Policy Institute (BPI) announced it will submit public comments on the Federal Reserve’s upcoming proposal to implement the Basel Framework, urging revisions to how Bitcoin is assigned risk weights within the banking regulatory system.
Conner Brown, BPI’s Executive Director, stated that under the Basel Framework, Bitcoin is classified as a high-risk asset and assigned a risk weight of 1,250%—higher than nearly all other asset classes—and described this classification as “the most stringent.” By comparison, cash, physical gold, and government bonds all carry a 0% risk weight.
A 1,250% capital requirement means banks holding Bitcoin must back each unit of Bitcoin with an equivalent amount of compliant collateral on a 1:1 basis, significantly increasing the cost for banks to hold this asset and restricting their ability to provide financial services to Bitcoin-related businesses.
