The Bitcoin Policy Institute plans to review and comment on an upcoming Federal Reserve proposal that could reshape how U.S. banks handle Bitcoin under international banking standards.
The Fed is expected to issue guidance next week on how American banks should implement Basel risk-weighting rules. A 90-day public comment period will follow, giving banks, policy groups, and industry participants the chance to submit feedback before the rules are finalized.
Currently, under Basel rules, Bitcoin carries a 1250% risk weighting, which treats it as an extremely risky asset. This means banks must hold much more capital against Bitcoin exposure than they would for traditional assets, discouraging them from offering services to Bitcoin users or companies.
Conner Brown of the Bitcoin Policy Institute said the organization intends to participate in the consultation to help ensure regulators “get Bitcoin’s treatment right.”
The outcome of this process could significantly influence whether U.S. banks expand or limit their engagement with Bitcoin-related services, making it a critical moment for the future of traditional finance interacting with digital assets.
