Basel Capital Rules Under Fire Amid Bitcoin Risk Weight Debate

Strategy CEO Phong Le has called on US regulators to reassess Basel capital rules, highlighting the 1,250% risk weight assigned to bitcoin under current standards. According to Le, this treatment significantly impacts how banks engage with digital assets, including bitcoin.

In a social media post, Le emphasized that the Basel Accords set global bank capital standards and risk-weighting rules for assets, which 'materially shape' how banks handle digital assets. He added that the US is not alone in implementing these frameworks, as they are developed by the Basel Committee of central banks and regulators across 28 jurisdictions.

Le's comments follow those of Chief Risk Officer Jeff Walton, who shared an illustration of Basel III-style risk weights under a standardized U.S. approach. The chart shows that bitcoin is categorized as unsecured crypto exposure with a risk weight of 1,250%, the highest level on the chart. This means that banks must hold proportionally more regulatory capital against bitcoin holdings.