Crypto Treasury Executives Press Basel Committee to Re‑examine Crypto Risk Weights
February 21 2026
Executive summary
- The Basel Committee on Banking Supervision (BCBS) continues to assign a 1,250 % risk weight to Bitcoin and other digital assets under the Basel III framework.
- Treasury leaders from the crypto‑custody sector argue that the metric vastly overstates the underlying risk and penalises banks that hold or service crypto‑related balances.
- Industry voices, including Jeff Walton (Strive), Phong Le (Strategy) and Chris Perkins (CoinFund), are lobbying for a recalibration that would bring crypto closer to the treatment enjoyed by cash, sovereign debt and physical gold.
- The BCBS has signalled openness to revisiting the formula, especially after a surge in stable‑coin market capitalisation that now approaches $300 bn.
- If the risk weight is lowered, banks could allocate capital more efficiently, potentially expanding crypto‑friendly services and improving return‑on‑equity (ROE) metrics.
The current Basel III stance on crypto
In the 2021 Basel III proposal, the Committee placed Bitcoin and comparable cryptocurrencies in the “highest‑risk” category, attaching a 1,250 % risk weight. Translated into capital requirements, banks must set aside $12.50 of regulatory capital for every $1 of crypto exposure. By contrast, cash, physical gold and sovereign bonds are assigned a 0 % weight, meaning they do not consume capital under the same framework.
The 2024 finalisation of those rules cemented the stance, despite a wave of criticism from the nascent digital‑asset industry. Critics contend that the blanket high weight ignores nuanced risk profiles across different token classes, custody models and market‑infrastructure improvements that have emerged over the past five years.
Why treasury executives are demanding change
Cost of compliance
Jeff Walton, Chief Risk Officer at Bitcoin‑focused treasury firm Strive, explained on X that the steep capital charge makes it “prohibitively expensive for banks to hold BTC on balance‑sheet”. The high requirement forces banks to either avoid crypto altogether or to impose steep fees on clients, an outcome that undermines the United States’ ambition to become the global “crypto capital”.
Impact on bank profitability
Chris Perkins, President of investment firm CoinFund, highlighted the knock‑on effect on banking profitability. The added capital charge drags down a bank’s return‑on‑equity, a core performance metric, effectively creating a “chokepoint” that disincentivises banks from providing crypto‑related services. Perkins likened the situation to an “Operation Chokepoint 2.0”, a subtle regulatory pressure that raises costs rather than outright bans.
Industry leadership calls for reform
- Phong Le, CEO of Strategy, the largest Bitcoin treasury manager, has publicly urged the Basel Committee to adopt a more granular approach that differentiates between high‑volatility tokens and stable‑valued assets such as stablecoins.
- These executives argue that the current uniform weight fails to reflect risk mitigation tools now available (e.g., custodial insurance, multi‑signature vaults, and on‑chain analytics) that have reduced operational and credit risk for banks.
Basel Committee’s response and possible pathways
The Committee’s 2021 risk‑weighting scheme has been under renewed scrutiny. In October 2025, internal reports indicated that the BCBS was evaluating whether the capital requirements could be eased in light of the explosive growth of stablecoins, whose market cap now hovers around $300 bn (RWA.xyz data).
Erik Thedéen, current chair of the BCBS, hinted in November 2025 that a “different approach” to the 1,250 % weight might be required. While no concrete amendment has been announced, the regulator’s willingness to revisit the framework suggests that a future revision is plausible, especially if industry lobbying intensifies.
Potential avenues being discussed include:
- Tiered risk weights – assigning lower percentages to assets with proven collateralisation, auditability, and lower price volatility (e.g., US‑based stablecoins).
- Reduced capital multiplier for custodial services – recognising the risk‑mitigation benefit of regulated custodians that hold crypto on behalf of banks.
- Dynamic risk‑weighting – employing quantitative models that adjust the weight based on real‑time market liquidity and volatility metrics.
Analytical perspective
Short‑term outlook
In the immediate term, banks are likely to continue limiting direct crypto exposure while expanding ancillary services (e.g., crypto‑related financing, advisory, and tokenisation of assets) that fall outside the stringent Basel calculation. The high capital charge remains a disincentive for full‑balance‑sheet holdings, positioning the United States behind jurisdictions such as Singapore or Switzerland, where regulators have adopted more flexible capital treatment for digital assets.
Medium‑term implications
Should the Basel Committee adopt a lowered or tiered risk weight, banks could re‑allocate capital from low‑yield sovereign holdings toward crypto‑related assets, potentially unlocking several hundred billion dollars in incremental lending capacity. This reallocation would improve ROE, satisfy investor demand for crypto exposure, and could accelerate the integration of digital assets into mainstream banking services.
Systemic risk considerations
A calibrated reduction in risk weights does not eliminate all systemic concerns. Crypto markets remain prone to sudden liquidity shocks and cross‑asset contagion effects. Any regulatory adjustment must be paired with robust stress‑testing frameworks that capture the unique price dynamics of blockchain‑based assets. Moreover, oversight of custodial firms, stablecoin issuers and DeFi platforms will become increasingly critical to prevent hidden exposures from re‑emerging under a softer capital regime.
Key takeaways
- Current Basel III risk weight (1,250 %) makes crypto capital‑intensive, discouraging banks from holding or servicing digital assets.
- Crypto treasury executives are lobbying for a revision that reflects improved risk management and the diversification of token types.
- The Basel Committee has shown tentative openness to revisiting the policy, especially as stablecoin utilisation expands.
- A revised risk‑weighting scheme could boost bank profitability and expand crypto‑related banking services, but must be balanced against systemic stability risks.
- Stakeholders should monitor BCBS communications throughout 2026 for any formal proposals that could reshape the regulatory landscape for crypto in the banking sector.
The information contained in this article is based on public statements from industry participants and recent Basel Committee releases. Readers are encouraged to conduct independent verification and follow regulatory updates as they develop.
Source: https://cointelegraph.com/news/btc-treasury-reform-1250-percent-risk-basel?utm_source=rss_feed&utm_medium=feed&utm_campaign=rss_partner_inbound
