Could a Basel III Update Unlock Billions for Bitcoin?
A significant shift in global banking regulations could soon reshape the relationship between traditional finance and Bitcoin. The Basel Committee on Banking Supervision is set to update its seminal Basel III framework in 2026, and market analysts are watching closely to see how Bitcoin (BTC) will be classified. According to Nic Puckrin, CEO of the Bitcoin Treasury Company (BTC), a modest improvement in Bitcoin’s risk rating could trigger a “huge” influx of institutional liquidity into the digital asset.
The Current High-Stakes Environment for Banks
Under the existing Basel III rules, established to strengthen bank capital requirements after the 2008 financial crisis, Bitcoin and similar crypto assets are saddled with a punitive 1,250% risk weight. This means a bank must hold capital reserves equal to the full value of any Bitcoin it holds on its balance sheet, a 1:1 ratio. Puckrin describes this as making it “almost impossible” for banks to custody BTC or offer related services, effectively locking them out of the emerging asset class.
“The Fed just announced a proposal on how these rules will be implemented in the US, with a 90-day public comment window,” Puckrin noted, pointing to a critical near-term opportunity for advocacy. “If BTC’s treatment improves even slightly, it could open the door for banks to finally integrate BTC into the financial system.”
Source: Nic Puckrin
A Stark Disparity in Risk Assessment
The 1,250% figure stands in stark contrast to the risk weights assigned to traditional assets. Jeff Walton, Chief Risk Officer at Strive (another Bitcoin treasury firm), highlights this discrepancy. Investment-grade corporate bonds, for instance, carry a risk weight of up to 75%. Meanwhile, assets considered risk-free, such as gold, government bonds, and physical cash, are assigned a 0% risk weight.
Risk weights for different asset classes under the Basel III framework. Source: Jeff Walton
Walton argues this represents a clear case of “risk is mispriced,” suggesting the regulatory framework does not align with the modern financial landscape where digital assets are gaining institutional traction.
Beyond “Operation Chokepoint”: A Regulatory Chokepoint
Chris Perkins, President of investment firm CoinFund, frames the Basel rules as a more subtle, yet potent, form of industry constraint compared to the overt banking pressures of “Operation Chokepoint 2.0.”
“It’s a very nuanced way of suppressing activity by making it so expensive for the bank to do those activities,” Perkins told Cointelegraph. The capital requirement acts as a financial disincentive so severe that it creates a different kind of chokepoint, discouraging banks from engaging with crypto not through explicit bans, but through economically prohibitive rules.
This perspective aligns with a coordinated push from the crypto industry. In February, executives from several crypto treasury companies publicly called for the Basel Committee to reform these rules, advocating for more accommodating risk weights that would permit banks to safely participate in the blockchain-based economy.
The debate now centers on the upcoming 2026 revision. The outcome will signal whether global regulators view Bitcoin as an unacceptable speculative danger or as a maturing asset class worthy of a calibrated, risk-based approach. For proponents, a re-rating is not just about fairness—it’s about unlocking a massive, regulated pool of capital that has, to date, been largely on the sidelines.
Editor’s Note: This article is based on statements from market analysts and executives in the Bitcoin treasury sector. The Basel Committee’s 2026 review process is ongoing, and final rules will be subject to international consensus and national implementation, such as the recent proposal from the U.S. Federal Reserve. Readers are encouraged to review the official policy documents and public comment periods for the most authoritative information.
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