Pierre Rochard, CEO of Bitcoin Bond Company, has formally warned US banking regulators that the current Basel III capital rewrite proposals create significant uncertainty by omitting clear guidance for Bitcoin (BTC) exposures. In comments submitted to the Federal Reserve (Fed), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC), Rochard highlighted a critical gap that could lead to legal risks and hinder institutional adoption.
The core issue is that the proposed rules, which cover credit, operational, and market risks for large banks, lack direct references to Bitcoin holdings, custody services, and derivatives. This leaves banks without a clear regulatory framework for classifying Bitcoin-related activities. Rochard emphasized that while regulators have provided guidance for tokenized securities—confirming they follow the same rules as traditional instruments—they have remained silent on Bitcoin.
Rochard pointed to the existing Basel Committee’s SCO60 framework, which assigns a 1250% risk weighting to unbacked crypto assets like Bitcoin, effectively requiring banks to hold capital at a 1:1 ratio for any BTC exposure. However, the US proposals do not confirm if they will adopt or modify this approach. This ambiguity forces banks to interpret how existing capital categories apply to Bitcoin assets, Bitcoin-backed loans, and custody, potentially leading to inconsistent treatment across the financial sector.
The expert warned that this regulatory uncertainty could expose the framework to legal challenges and limit bank participation in Bitcoin markets. Activities such as collateralized lending and offering custody services become difficult to structure without predictable capital treatment. Rochard argued that clearer rules could improve lending margins, reduce borrowing costs, and enhance overall market liquidity.
The Federal Reserve has indicated it will release a new draft regulation on Basel risk weighting rules, followed by a 90-day public consultation period. Rochard's intervention pressures regulators to address the Bitcoin gap before finalizing the rules, as the current silence risks stifling institutional adoption and creating operational constraints for major banks.
