BTC treasury executives call for reform of 1,250% risk weight in Basel III

CoinTelegraph

by Vince Quill

February 20, 2026

AI-Generated Deep Dive Summary

Crypto treasury executives are urging the Basel Committee on Banking Supervision (BCBS) to reconsider the steep 1,250% risk weight assigned to Bitcoin and other cryptocurrencies under the Basel III framework. This high requirement forces banks holding crypto assets to back each unit with equivalent collateral, making it significantly more expensive than holding traditional assets like cash or gold, which carry a 0% risk weight. The current framework, established in 2019, places crypto at the highest risk category alongside private equity's 400% weight, creating a barrier for financial institutions to engage with digital assets. The Basel III framework categorizes assets based on perceived risk levels, affecting how banks must collateralize their holdings. Cash and physical gold are considered low-risk (0%), while government debt is also classified as minimal risk. In contrast, cryptocurrencies face an 1,250% requirement, meaning banks must hold $1 in collateral for every $1 of crypto assets, effectively limiting their participation in the crypto market. This issue matters to crypto enthusiasts and investors because higher regulatory hurdles can stifle institutional adoption. By reducing the risk weight, more financial institutions may be encouraged to integrate cryptocurrencies into their operations, potentially legitimizing digital assets within traditional finance. Crypto advocates argue that such a move could unlock significant growth opportunities for the cryptocurrency sector, fostering greater market stability and acceptance. The push for reform highlights the growing dialogue between the crypto community and regulatory bodies. By addressing these challenges, regulators may find a middle ground that balances risk management with innovation. The outcome

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Originally published on CoinTelegraph on 2/20/2026