Crypto Executives Urge Basel Committee to Revise Bitcoin Risk Weighting
Crypto treasury executives are urging the Basel Committee on Banking Supervision (BCBS) to reconsider the 1,250% risk weight assigned to Bitcoin and other cryptocurrencies under the Basel III framework. According to Cointelegraph, this requirement mandates that banks must back any Bitcoin (BTC) on their balance sheets with approved collateral at a 1:1 ratio, making it more costly to hold BTC compared to other asset classes. In contrast, cash, physical gold, and government debt carry a 0% risk weight under the same framework.
Jeff Walton, chief risk officer at Bitcoin treasury company Strive, expressed concerns over the current regulations, stating that if the U.S. aims to be the 'crypto capital' of the world, banking regulations need to evolve as risk is currently mispriced. The capital rules under Basel III discourage banks from holding BTC and other cryptocurrencies due to the high collateral costs associated with digital assets, which in turn lowers a bank’s return on equity, a crucial metric for profitability, as noted by Chris Perkins, president of investment company CoinFund.
The Basel Committee initially proposed these risk weightings in 2021, categorizing BTC and other cryptocurrencies in the highest risk category with a 1,250% risk weight. In 2024, the committee finalized these capital requirements, which faced significant backlash from the crypto industry. Phong Le, CEO of Strategy, the largest Bitcoin treasury company, has called for a reform of the current Basel III crypto risk weighting.
Chris Perkins highlighted that the current rules represent a "different type of chokepoint" compared to the overt debanking of crypto companies, which some industry insiders have referred to as Operation Chokepoint 2.0. He described it as a nuanced method of suppressing activity by making it prohibitively expensive for banks to engage in such activities. In October 2025, reports indicated that the committee was considering easing the capital requirements for digital assets in response to the growing stablecoin market cap, which is approaching $300 billion, according to data from RWA.xyz. The following month, Erik Thedéen, chair of the BCBS, suggested that the international banking regulator might need a "different approach" to the 1,250% risk weight for cryptocurrencies, hinting at a potential change in collateral requirements.