Banks holding BTC will be subject to a 1250% risk weighting. The Federal Reserve is pushing for Basel III. Bitcoin is classified as a "Group 2b asset," meaning it faces a 1250% risk weighting. This means that if a bank wants to hold $1 million worth of Bitcoin, it needs to have $1 million in capital. Calculated according to the agreement: $1 million × 1250% = $12.5 million in risk-weighted assets. $12.5 million × 8% capital adequacy ratio = $1 million in capital. This is exactly a 1:1 full capital requirement, meaning banks must fully cover their Bitcoin exposure with an equivalent amount of core capital, leaving almost no room for leverage. This is practically telling banks to avoid Bitcoin altogether. However, banks not holding it doesn't mean ETFs can't hold it, or that you can't hold it. 🙃