Fed’s New Bitcoin Rule Could Change Everything (But Probably Won’t)

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The Bitcoin Policy Institute is about to do what every kid does when they see a teacher’s homework assignment: panic, then try to rewrite the rules. The Federal Reserve is basically asking banks to treat Bitcoin like a radioactive cheese wedge, and now the Institute is stepping in to say, “Hey, maybe we should all take a breath and stop acting like Bitcoin is the 2008 crash wearing a party hat.”

Summary

  • The Bitcoin Policy Institute plans to review and comment on an upcoming Federal Reserve proposal on Basel rules. Because nothing says “we’re serious” like a 90-day comment period where the only voices heard are the ones with the most Twitter followers.
  • The proposal will open a 90-day public comment period for industry feedback. Because who needs sleep when you can argue about crypto risk weights?
  • Current Basel guidance assigns Bitcoin a 1250% risk weighting, which is like giving it a 500% tax audit and a restraining order. Banks are now required to hold more capital for Bitcoin than they do for a nuclear power plant. Who knew?

Bitcoin Policy Institute to weigh in as Fed prepares Basel proposal for banks

According to Conner Brown, the Federal Reserve is expected to issue a public proposal next week outlining how American banks should implement risk-weighting guidance under the Basel Accords. Because nothing says “we’re ready for the future” like a 90-day delay and a bunch of lawyers.

The proposal will apply to the largest U.S. banks and will open a 90-day public comment period, allowing industry participants, policy groups and financial institutions to submit feedback before the rules are finalized. Because nothing says “we value input” like a 90-day window where the only people who actually care are the ones who already have a stake in the game.

Brown said the institute intends to participate in the process to ensure regulators “get Bitcoin’s treatment right.” Which, if you think about it, is like asking a toddler to evaluate a recipe. But hey, at least they’re trying.

Important Bitcoin Policy Update from D.C. 🇺🇸

The Federal Reserve just announced that next week they will be issuing a public proposal for how Banks should implement Basel risk weighting guidance for America’s largest banks.

Bitcoin is currently treated as a toxic asset under…

– Conner Brown (@BitcoinConner) March 12, 2026

Under the Basel framework, Bitcoin (BTC) is currently assigned a 1250% risk weighting, which is like telling a bank they need to keep a 1250% reserve for a goldfish. Such a requirement forces banks to hold significantly higher levels of capital against Bitcoin exposure compared with most traditional assets. Because nothing says “we’re confident in this asset class” like a 1250% buffer.

Critics argue that this classification makes it difficult for banks to provide financial services to Bitcoin users and companies, as the capital requirements can discourage institutions from interacting with the sector. Because nothing says “we’re open to innovation” like making it harder for banks to handle Bitcoin than a toddler with a smartphone.

“The Federal Reserve just announced that next week they will issue a public proposal for how banks should implement Basel risk weighting guidance,” Brown said in a post on X, adding that the think tank would review the document and submit a formal public comment. Because who wouldn’t want to see a 90-day comment period where the only voices heard are the ones with the most Twitter followers?

The upcoming consultation comes as policymakers in the United States continue to debate how digital assets should fit within the global banking regulatory framework. Because nothing says “we’re ahead of the curve” like a 90-day delay and a bunch of lawyers.

Industry advocates say the outcome of the Federal Reserve’s proposal could play a key role in determining whether traditional financial institutions expand or limit their engagement with Bitcoin-related services in the future. Because nothing says “we’re ready for the future” like a 90-day delay and a bunch of lawyers.

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2026-03-13 11:03