March 15, 2026 — Proposed updates to international banking regulations could unlock substantial liquidity for Bitcoin by altering how banks must reserve capital against crypto holdings, according to market analysis.
The High Cost of Holding Bitcoin
The current Basel III framework, which governs global bank capital requirements, assigns Bitcoin and similar digital assets a punitive 1,250% risk weight. This classification forces banks to hold a dollar in capital for every dollar of Bitcoin on their balance sheets, making it prohibitively expensive to offer crypto custody or trading services.
Market analyst Nic Puckrin stated this requirement makes it “almost impossible” for banks to hold Bitcoin or integrate related services. “If BTC’s treatment improves even slightly, it could open the door for banks to finally integrate BTC into the financial system,” Puckrin said.
The rules were proposed by the Basel Committee on Banking Supervision (BCBS) in 2021, placing cryptoassets in the highest risk category.
A Call for Reform
Industry executives have repeatedly called for more accommodating risk weights. In February, leaders from several crypto treasury companies urged regulators to reform the Basel rules to allow traditional finance to participate in the blockchain economy.
Jeff Walton, chief risk officer at Bitcoin treasury company Strive, highlighted the disparity in treatment. Under current rules, investment-grade corporate bonds carry a maximum 75% risk weight, while gold and government bonds have a 0% weight. “Risk is mispriced,” Walton asserted, comparing Bitcoin’s 1,250% rating.
A Subtle Chokepoint
Some industry observers view the capital requirements as a regulatory barrier more nuanced than direct prohibitions. Chris Perkins, president of investment firm CoinFund, described the rules to Cointelegraph as “a very nuanced way of suppressing activity by making it so expensive for the bank to do those activities.”
This contrasts with more overt actions, such as efforts to deny banking services to crypto companies, sometimes referred to as “Operation Chokepoint 2.0.” The capital framework creates a financial disincentive rather than an outright ban.
The Path Forward
The Basel III rules are scheduled for review and potential update in 2026. The U.S. Federal Reserve recently announced a proposal for implementing these rules domestically, opening a 90-day public comment window.
A reduction in Bitcoin’s risk weight could fundamentally shift its accessibility within the traditional financial system. Banks seeking efficient capital deployment could allocate significant resources toward crypto services if the regulatory cost declines.
For further details on the Basel Committee’s framework, visit the Bank for International Settlements official page. The Federal Reserve’s press release archive provides official statements on U.S. implementation.
Updated insights and analysis added for better clarity.
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