Bitcoiner Group to Fight Bitcoin’s Treatment as ‘Toxic Asset’

He added it carries a 1,250% risk weighting, which was “harsher than virtually all other asset classes.”

“More efficient regulation” is the aim: Fed

Federal Reserve vice chair for supervision Michelle Bowman said on Thursday that the agency will be proposing rules in the coming weeks to implement the final phase of Basel in the US.

Bowman said that the aim is “more efficient regulation and banks that are better [positioned] to support economic growth, while preserving safety and soundness.”

The 1,250% capital requirement means that banks must back any Bitcoin on their balance sheets at a 1:1 ratio with approved collateral, making holding the cryptocurrency more costly than other asset classes.

Cash, physical gold and government debt carry a 0% risk weight under the Basel framework.

“The most punitive classification”: Bitcoin Policy Institute

Brown said in a blog post last month that the treatment of Bitcoin is the “most punitive classification” in the Basel Committees capital framework and a “category error.”

In 2021, the Basel Committee proposed placing crypto in its high-risk Group 2 set of assets. Group 2 holdings were restricted to under 1% of the value of their Group 1 holdings.

“This risk weighting makes it extremely difficult for banks to provide financial services to Bitcoiners and Bitcoin companies,” Brown said.