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The US crypto world is preparing for a serious confrontation with the Federal Reserve System. The stumbling block is the new rules, which can dramatically affect how banks will be able to work with digital assets. The Bitcoin Policy Institute (BPI), designed to protect the interests of the crypto industry before the authorities, has already announced its intention to challenge these upcoming changes.

Last week, the Fed announced public hearings on the implementation of the Basel Committee standards in the United States. We are talking about a risk assessment methodology for assets that are listed on banks' balance sheets. It is these rules that determine how safe the regulator considers a particular financial instrument.

Conner Brown, managing director of BPI, officially confirmed that the organization will carefully study all the Fed's proposals and prepare a detailed comment. The main task is to achieve a revision of the approach to evaluating bitcoin, which in the current version of the document has received the worst possible category.

The essence of the problem lies in the methodology of calculating bank capital. According to the Basel standards, different assets have different risk ratios. For example, cash in fiat currencies, gold, and government debt have zero risk.

With bitcoin, the situation is exactly the opposite. Regulators propose to set the risk ratio at 1250%. This means that for every bitcoin on the bank's balance sheet, the credit institution will have to keep an equivalent amount in highly liquid reserves approved by the regulator. In fact, the bank will have to provide each bitcoin with a dollar in a one-to-one ratio.

Such requirements make any interaction between banks and bitcoin economically unprofitable. Servicing crypto clients, opening accounts for bitcoin companies, storing digital assets as collateral — all this becomes impossible due to the excessive burden on capital. Banks simply cannot afford to hold such amounts of reserves.

Conner Brown has previously called this approach the most stringent in the entire Basel standards system. In his opinion, the classification of bitcoin contains a fundamental error: the digital asset is placed in the same category as high-risk instruments, although its nature is completely different. These are not complex derivatives or questionable obligations, but a fully secured and transparent asset.

BPI representatives believe that the adoption of the Basel standards in their current form will create insurmountable barriers for banks wishing to serve the bitcoin community and relevant companies. In fact, this will lead to the isolation of an entire sector of the economy from the banking system, which contradicts the stated goals of innovation and financial technology development.

The upcoming public hearings will be a key test for the entire American crypto industry. Whether the Bitcoin Policy Institute can convince regulators of the fallacy of the current approach depends not only on banks' access to bitcoin, but also on the future of the legal crypto market in the United States.