Executives from the cryptocurrency treasury sector are urging the Basel Committee on Banking Supervision (BCBS), a global banking regulatory authority, to reconsider the staggering 1,250% risk weight assigned to Bitcoin and other cryptocurrencies within the Basel III framework.
This exorbitant capital requirement dictates that banks must secure any Bitcoin ($BTC) they hold with an equivalent amount of approved collateral. As a result, maintaining $BTC becomes significantly more expensive compared to other asset classes.
In contrast, assets such as cash, physical gold, and government bonds are classified with a 0% risk weight under Basel III regulations.
The various risk weights for different asset categories held by banks under Basel III. Source: Jeff Walton
“If America aims to be recognized as the ‘crypto capital’ globally, then banking regulations must evolve. The current assessment of risk is flawed,” stated Jeff Walton, chief risk officer at Strive—a Bitcoin treasury firm—on X.
The stringent capital rules established by Basel III deter banks from investing in $BTC and other cryptocurrencies due to their high collateral costs. This situation adversely affects a bank’s return on equity—a vital indicator of profitability—according to Chris Perkins, president of investment firm CoinFund.
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The existing risk weightings were proposed by the Basel Committee in 2021 when they categorized $BTC and similar digital currencies into the highest-risk bracket with an imposed 1,250% rate on these assets.
By 2024, these capital requirements were solidified based on their initial proposal from three years prior but faced significant backlash from those within the cryptocurrency industry.
Pho Le—the CEO of Strategy and one of the largest Bitcoin treasury firms—advocates for reforming current crypto-related risks outlined in Basel III. Source: Pho Le
This regulatory framework has created what Perkins described as “a different kind of chokepoint,” contrasting it with direct efforts aimed at debanking cryptocurrency firms that some insiders have labeled Operation Chokepoint 2.0 during discussions with Cointelegraph back in August 2025.
“This is a subtle method for stifling activity by imposing excessive costs on banks engaging in such operations,” Perkins remarked.
Around October 2025, reports surfaced indicating that BCBS was contemplating relaxing its stringent capital requirements for digital assets due to an increase in stablecoin market capitalization approaching $300 billion according to data sourced from RWA.xyz.
The following month saw Erik Thedéen—the chairperson of BCBS—suggesting that there might be a need for “a new approach” regarding cryptocurrencies’ hefty 1,250% risk weighting which hinted at possible adjustments concerning collateral stipulations moving forward.
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