A significant policy step regarding Bitcoin’s position within the US banking system has emerged. The Fed announced that next week it will release a new draft of publicly available regulations on how the country’s largest banks should implement Basel risk weighting rules.
Under current Basel banking regulations, Bitcoin is classified as a very high-risk asset for banks. The 1250% risk weighting assigned to BTC in the regulations means a stricter capital requirement than almost all other asset classes. This makes it significantly more difficult for banks to hold BTC on their balance sheets or provide financial services to Bitcoin-related companies.
Following the publication of the new proposal, a 90-day public consultation period will begin. During this period, industry representatives, financial institutions, and public institutions will be able to submit their views and suggestions regarding the regulation.
The Bitcoin Policy Institute (BPI), a BTC-focused policy and research organization, announced it will closely examine the draft. The organization argues that US regulators need to reassess their approach to Bitcoin and plans to submit a formal public opinion.
*This is not investment advice.
