Crypto Treasury Executives Urge Basel Committee on Banking Supervision to Revise 1250 Percent Risk Weight on Bitcoin and Digital Assets Across Global Banks

There’s a growing frustration bubbling up inside the crypto industry — and this time, it’s aimed squarely at global banking regulators.

A number of crypto treasury executives are urging the Basel Committee on Banking Supervision (BCBS) to rethink how it treats Bitcoin and other digital assets under the Basel III framework.

At the center of the debate is a rule that many insiders say unfairly punishes banks for holding crypto.

The complaint? A 1,250% risk weight slapped on Bitcoin and similar assets.

That number might sound abstract, but in banking terms, it’s massive.

What a 1,250% Risk Weight Actually Means

Under the Basel III capital framework, assets on a bank’s balance sheet are assigned “risk weights.”

The higher the perceived risk, the more capital a bank must hold to back that asset.

For Bitcoin (BTC) and most other cryptocurrencies, the BCBS assigned a 1,250% risk weight. In simple terms, that translates into a near 1:1 capital backing requirement.

If a bank holds $100 worth of Bitcoin, it must hold roughly $100 in approved capital to support it.

That makes crypto one of the most expensive assets a bank can touch.

Now compare that to other traditional assets. Cash? Zero percent risk weight.

Physical gold? Also zero percent. Government bonds issued by stable sovereigns? Again, zero percent.

So while banks can hold sovereign debt without setting aside additional capital, they’re effectively penalized for holding digital assets.

Industry Voices Say Risk Is Mispriced

Jeff Walton, chief risk officer at Bitcoin treasury firm Strive, has been outspoken about the issue.

He argues that if the United States truly wants to position itself as the world’s crypto capital, its banking regulations need to reflect that ambition.

In his view, the current framework doesn’t accurately price risk — it exaggerates it.

Others in the space echo that sentiment.

Chris Perkins, president of investment firm CoinFund, has pointed out that high capital requirements drag down a bank’s return on equity, one of the most important metrics for measuring profitability.

When capital costs go up, incentives disappear.

And when incentives disappear, banks step away.

A Subtle Barrier Instead of Overt Debanking

This isn’t the first time crypto has clashed with traditional finance.

In previous years, some industry insiders referred to waves of banking restrictions as “Operation Chokepoint 2.0,” a nod to earlier government pressure campaigns against certain industries.

But this feels different.

Perkins described the Basel III treatment as a more subtle chokepoint — not an outright ban, but a rule structure that quietly makes crypto activity prohibitively expensive for banks.

Instead of saying “no,” the framework effectively says, “You can do it — but it’ll cost you.”

And for many institutions, that’s enough to stay away.

How We Got Here

The Basel Committee first proposed these strict risk weightings in 2021, placing Bitcoin and other cryptocurrencies in the highest risk category available under Basel III.

By 2024, those requirements were finalized — despite significant backlash from crypto companies and some financial institutions.

At the time, regulators were concerned about volatility, custody risks, and the relatively short track record of digital assets.

From their perspective, assigning the highest possible risk weight was a conservative approach designed to protect global financial stability.

Since then, however, the landscape has evolved.

Bitcoin has matured into a trillion-dollar asset class at various points.

Major asset managers have launched spot Bitcoin exchange-traded products.

Institutional custody has improved. And stablecoins have surged, with market capitalization approaching $300 billion.

That growth has forced regulators to reconsider whether a one-size-fits-all 1,250% risk weight still makes sense.

Signs of Possible Movement

In late 2025, reports surfaced that the Basel Committee was reviewing its approach to digital asset capital requirements.

The rapid rise of stablecoins — many of which are backed by short-term government securities — appears to have played a role in that reassessment.

Erik Thedéen, chair of the BCBS, publicly acknowledged that the committee may need a “different approach” to the 1,250% treatment for cryptocurrencies.

That statement, while cautious, was enough to spark optimism across the crypto industry.

It signaled that regulators are at least open to revisiting the framework — something that seemed unlikely just a year earlier.

The Bigger Picture: Crypto Isn’t Just an Outsider Anymore

There’s an irony in all this.

Crypto was originally designed to challenge banks and traditional finance.

Yet today, some of the loudest voices calling for reform are crypto treasury executives who want banks more deeply involved in digital assets.

The rise of stablecoins, tokenized assets, and institutional custody has blurred the line between decentralized finance and traditional banking.

Crypto firms now need banking partners, and banks are exploring blockchain-based services.

But regulatory friction remains.

If capital requirements stay this high, banks may continue limiting their exposure — even as clients demand crypto services.

What’s Next?

The pressure on the Basel Committee is unlikely to fade.

As stablecoin markets expand and tokenization of real-world assets accelerates, regulators will have to balance financial stability with competitiveness.

Countries that loosen restrictions may attract innovation and capital. Those that don’t risk falling behind.

We could see a tiered approach emerge — differentiating between volatile, unbacked crypto assets and more structured digital instruments like fully reserved stablecoins.

Another possibility is a recalibration of risk weights based on custody quality, market liquidity, or volatility metrics rather than a blanket 1,250% classification.

For now, the crypto industry is watching closely.

A change in Basel treatment wouldn’t just adjust accounting rules — it could reshape how deeply banks integrate crypto into their balance sheets and long-term strategy.

Summary

Crypto treasury leaders are urging the Basel Committee on Banking Supervision to revise the 1,250% risk weight applied to Bitcoin and other cryptocurrencies under Basel III.

The current rule forces banks to hold nearly dollar-for-dollar capital against crypto holdings, making digital assets far more expensive to maintain than cash, gold, or government debt, which carry 0% risk weights.

Industry figures argue the rule misprices risk and subtly discourages banks from engaging with crypto.

After initially proposing the strict framework in 2021 and finalizing it in 2024, the Basel Committee now appears open to reconsideration amid rapid stablecoin growth and broader institutional adoption of digital assets.

The outcome of this debate could significantly influence the future relationship between global banking and the crypto sector.