Crypto treasury executives are calling on the Basel Committee on Banking Supervision (BCBS), an international banking regulatory body, to revise the 1,250% risk weight for Bitcoin and other cryptocurrencies under the Basel III framework.
The 1,250% capital requirement means that banks must back any Bitcoin (BTC) on their balance sheets at a 1:1 ratio with approved collateral, making BTC holding more costly than other asset classes.
For comparison, cash, physical gold and government debt carry a 0% risk weight under the Basel III framework.
Basel III risk weights for different asset classes held by banking institutions. Source: Jeff Walton“If the US wants to be the ‘crypto capital’ of the world, the banking regulations need to change. Risk is mispriced,” Jeff Walton, chief risk officer at Bitcoin treasury company Strive, wrote on X.
The capital rules under Basel III discourage banks from holding BTC and crypto because of the relatively high cost of holding digital assets vis-a-vis reserve requirements, which lowers a bank’s return on equity, a critical metric for bank profitability, according to Chris Perkins, president of investment company CoinFund.
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Basel responds to growing backlash and pressure from the crypto industry
The Basel Committee proposed the current risk weightings in 2021, placing BTC and other cryptocurrencies in the highest risk category and imposing a 1,250% risk weight on digital assets.
In 2024, the committee finalized the capital requirements outlined in the 2021 proposal, which drew heavy backlash from the crypto industry.
Phong Le, CEO of Strategy, the largest Bitcoin treasury company, urges reform of the current Basel III crypto risk weighting. Source: Phong LeThe current rules represent a “different type of chokepoint” than the overt debanking of crypto companies in what some industry insiders dubbed Operation Chokepoint 2.0, Perkins told Cointelegraph in August 2025.
“It’s a very nuanced way of suppressing activity by making it so expensive for the bank to do those activities,” Perkins said.
In October 2025, reports emerged that the committee was considering easing the capital requirements for digital assets in response to the surge in the stablecoin market cap, which is nearing $300 billion, according to data from RWA.xyz.
The following month, Erik Thedéen, chair of the BCBS, said the international banking regulator may need a “different approach” to the 1,250% risk weight for cryptocurrencies, signaling a potential change in reserve requirements.
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Source: https://cointelegraph.com/news/btc-treasury-reform-1250-percent-risk-basel?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
