Bitcoin Advocates Challenge Basel’s 'Toxic' Rules as Fed Moves to Implement Framework
The Bitcoin Policy Institute is ramping up advocacy as the Federal Reserve rolls out proposals to implement the Basel capital framework in the U.S. BPI argues that Basel-style risk weightings and capital charges applied to crypto exposures would be “toxic” for Bitcoin, raising costs for banks that custody or provide services to the market and potentially shrinking liquidity and access for institutional investors. The dispute matters because the Fed’s implementation choices will shape how banks treat crypto assets — from custody and lending to balance-sheet treatment — and could either entrench barriers or allow clearer paths for institutional participation. BPI’s push signals a broader effort to secure tailored, proportionate rules for Bitcoin; market participants should watch the Fed’s comment period and potential carve-outs or clarifications that could follow.