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A sweeping rewrite of Basel III banking rules has left one of the most consequential questions for crypto markets unresolved: how banks should treat Bitcoin on their balance sheets.
Pierre Rochard, CEO of The Bitcoin Bond Company, warned US banking regulators that the revised Basel III framework fails to explicitly address Bitcoin, creating regulatory ambiguity that could shape institutional adoption and capital flows into the asset.
Rochard submitted formal comments to the Federal Reserve, FDIC, and OCC, arguing that the proposal covers credit, market, and operational risk categories but does not clarify how Bitcoin holdings, custody, lending, or derivatives should be treated under capital rules.
Pierre Rochard has submitted a formal comment to the Fed, FDIC, and OCC, warning that the March 19 Basel III "Endgame" proposal fails to mention Bitcoin or digital assets even once.
Rochard argues that "silence is not a strategy" and that leaving $BTC out of the capital… pic.twitter.com/vOUXLtBdPF
— Conor Kenny (@conorfkenny) March 30, 2026
“This gap could create legal risk and uncertainty for banks,” Rochard warned, adding that the absence of clear guidance may discourage financial institutions from engaging with Bitcoin-related services.
At the center of the debate is the Basel Committee’s SCO60 crypto framework, which assigns unbacked crypto assets like Bitcoin a 1,250% risk weight – one of the most punitive capital treatments in modern banking regulation.
Under these rules, banks must hold $1 of capital for every $1 of Bitcoin exposure, effectively making direct Bitcoin holdings uneconomical for most financial institutions.
Analysts say this framework has acted as a structural barrier to institutional adoption, preventing banks from offering custody, lending, and structured products tied to Bitcoin.
“Banks effectively can’t hold Bitcoin under current Basel rules,” analysts have noted, adding that any revision lowering the risk weight could unlock significant liquidity from traditional finance.
However, Rochard’s warning suggests regulators may be moving forward without explicitly deciding whether the US will adopt the global framework, modify it, or create a separate approach.
The uncertainty arrives at a critical moment for Bitcoin’s institutional adoption.
Large asset managers, banks, and custodians have been exploring crypto services, but capital treatment remains one of the biggest barriers. Without clarity, banks face difficulty modeling:
Rochard warned that regulators “cannot quietly decide” Bitcoin’s treatment without clear justification and transparent risk modeling, emphasizing that capital rules will ultimately determine how much institutional capital can enter the market.
Some analysts view the Basel III rewrite as one of the largest potential catalysts for Bitcoin institutional adoption.
Market strategist Nic Puckrin said even a modest reduction in Bitcoin’s risk weighting could unlock large amounts of bank liquidity, allowing traditional financial institutions to expand crypto services.
LATEST: 🏦 Banks effectively can't hold Bitcoin under Basel III, but if a 2026 rule update lowers its risk rating, it could trigger a "huge" BTC liquidity influx, says Coin Bureau's Nic Puckrin. pic.twitter.com/HVNa8KPYAU
— CoinMarketCap (@CoinMarketCap) March 16, 2026
A Federal Reserve vote on updated Basel capital rules is expected to be closely watched, with analysts noting the decision could reshape institutional participation in Bitcoin markets.
Another concern raised by industry participants is global regulatory fragmentation.
If US regulators diverge from Basel standards, banks operating across jurisdictions could face inconsistent capital requirements, complicating cross-border crypto activity and institutional product development.
However, inconsistent treatment could slow adoption, while others say a more flexible US framework could accelerate Bitcoin integration into traditional finance.
A Structural Decision for Bitcoin’s Institutional Future
The Basel III rewrite highlights a broader shift: Bitcoin is no longer just a market asset – it is becoming a regulated balance-sheet asset for global banks.
The outcome of the capital treatment debate could determine:
For now, the lack of clarity leaves institutions waiting.
And as regulators move toward finalizing Basel III revisions, the question remains unresolved: Will Bitcoin be treated as a high-risk speculative asset or as an emerging institutional financial instrument?
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