The latest Bank Policy Institute (BPI) report highlights a significant disparity in how banks are required to hold capital against Bitcoin positions compared to other assets, such as gold and AA-rated bonds. Currently, under Basel’s 1,250% risk weight rule, banks must reserve $100 million in capital for a $100 million Bitcoin position, while holding gold requires no additional capital, and AA-rated bonds require $1.6 million. This regulation has sparked debate as over 153 companies collectively hold $78 billion in Bitcoin, and the existing capital requirements appear increasingly misaligned with the growing adoption of Bitcoin as a corporate treasury asset. These developments contribute to ongoing calls for regulatory adjustments to address the challenges and facilitate broader financial integration of digital assets.
BPI report critiques Basel’s 1,250% Bitcoin risk weight
