Bitcoin Policy Institute Plans Challenge to Basel Framework’s ‘Toxic’ Treatment of Crypto

The Basel Committee on Banking Supervision finalized its prudential standard for banks’ cryptoasset exposures in December 2022, classifying unbacked cryptoassets such as Bitcoin as Group 2 assets subject to a risk weight of up to 1,250%. Implementation was delayed until January 1, 2026. The rules will raise the capital cost for banks that hold or provide services for cryptoassets.

The Bitcoin Policy Institute, or BPI, recently said it would submit a public comment to the U.S. Federal Reserve opposing the treatment of Bitcoin as a “toxic asset” subject to a 1,250% risk weight. BPI argues that regulation should be proportionate to actual risk. As of the report’s publication, the organization had not announced a formal submission date or released the full text of its comment.