The Federal Reserve will initiate a 90-day consultation period for the Basel III proposal, with Bitcoin facing a 1250% risk weight
According to market news, Federal Reserve Vice Chair for Supervision Michelle Bowman stated that U.S. regulators will propose rules for implementing the final phase of the Basel III framework in the coming weeks, expected to be released during the week of March 17 to 21, followed by a 90-day public comment period.
The proposal is being coordinated by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation. According to the global crypto framework finalized by the Basel Committee in 2022, btc-42">Bitcoin is classified as a Group 2b asset, which regulators consider difficult to hedge and inherently volatile, facing a risk weight of 1250%. This means that a bank holding $100 million in Bitcoin exposure will be viewed as having $1.25 billion in risk-weighted assets, requiring approximately $100 million in capital.
Compared to the zero risk weight for cash, gold, and U.S. Treasury securities, as well as the 20%-100% range for corporate loans, the capital treatment of Bitcoin is extremely harsh. Crypto industry institutions criticize the framework for misclassifying Bitcoin, hindering banks from providing related services.
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