Federal Reserve to Unveil Basel III Crypto Capital Rules, Bitcoin Assigned 1,250% Risk Weight

Michelle Bowman, Vice Chair for Supervision at the Federal Reserve, announced that U.S. regulators intend to unveil proposed rules for the final phase of Basel III during the week of March 17-21. These rules, which will be followed by a 90-day public comment period, implement the global crypto framework finalized by the Basel Committee in 2022. Under this framework, Bitcoin is classified as a Category 2b asset, carrying a stringent 1,250% risk weight. This means a $100 million Bitcoin exposure would necessitate approximately $100 million in regulatory capital, a measure that industry groups, as reported by ChainCatcher, have criticized for potentially hindering banks' crypto service offerings due to Bitcoin's alleged misclassification.