The Federal Reserve, in collaboration with the Office of the Comptroller of the Currency and the Federal Deposit Insurance Corporation, is set to propose new rules to implement the final phase of Basel III, focusing on cryptocurrency regulations. The proposal, expected to be released between March 17 and 21, will enter a 90-day public comment period. Under the Basel Committee's global crypto framework, Bitcoin is classified as a Category 2b asset, carrying a risk weight of 1,250% due to its volatility and hedging challenges. This classification implies that banks with Bitcoin exposure must treat it as significantly riskier than traditional assets, requiring substantial capital reserves. For instance, a $100 million Bitcoin exposure would necessitate $1.25 billion in risk-weighted assets, demanding approximately $100 million in capital. This stringent capital requirement contrasts sharply with zero risk weights for cash, gold, and U.S. Treasuries, and lower weights for corporate loans. Industry groups have criticized the framework, arguing it misclassifies Bitcoin and restricts banks from offering related services.