Pierre Rochard, CEO of The Bitcoin Bond Company, has warned US banking regulators that their proposed Basel III capital overhaul fails to address how Bitcoin-related activities should be treated—an omission he says could create legal uncertainty and influence how much capital banks are required to hold against the asset.
In a formal comment submitted on March 29 to the US Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, Rochard argued that regulators should not finalize rules that effectively determine capital requirements for Bitcoin-related activities without clearly outlining the framework and supporting evidence behind those decisions.
The proposals, released on March 19, aim to comprehensively revamp the US bank capital framework. While they address areas such as credit risk, market risk, operational risk, and counterparty exposures for major banks, they make no mention of Bitcoin, crypto, or digital assets. This leaves uncertainty around how existing categories would apply to Bitcoin holdings, lending, custody, and derivatives.
This gap is significant because Basel standards already impose strict capital requirements on certain unbacked crypto exposures. However, the US proposals do not clarify whether similar treatment will apply to Bitcoin-related activities, leaving banks uncertain about the financial viability of services such as custody, lending, derivatives, and direct holdings.
Rochard argued that regulators cannot leave the issue unresolved, warning that any final rule that implicitly imposes—or maintains—a capital treatment for Bitcoin-related activities without clear explanation could be legally vulnerable.
Rochard presses regulators over Bitcoin treatment
He pointed to the Basel Committee’s crypto asset framework, known as SCO60, which assigns a 1,250% risk weight to unbacked crypto assets like Bitcoin. Rochard said US regulators need to clarify whether they plan to adopt this standard, apply parts of it selectively, or rely on existing domestic capital rules instead.
He also noted that regulators have recently provided clearer guidance on other digital assets. On March 5, the same agencies issued a FAQ on tokenized securities, stating that eligible tokenized assets should generally receive the same capital treatment as their traditional counterparts and that the framework is “technology neutral.” However, no similar guidance has been offered for Bitcoin exposures.
Without this clarity, banks are left to interpret how the rules apply to direct Bitcoin holdings, Bitcoin-backed lending, custody services, and derivatives, adding uncertainty across the sector.
Prior to the proposal’s release, some analysts had expected the updated framework might ease capital requirements and boost liquidity for Bitcoin-related activities.
“The fiat system should stop sabotaging itself,” Rochard said in a post on X, adding that clearer Bitcoin banking rules could improve banks’ net interest margins and lower borrowing costs.
