Pierre Rochard, the CEO of The Bitcoin Bond Company, cautioned US banking authorities regarding their Basel III update, asserting that they must not leave ambiguous how Bitcoin should be treated under new regulations.

Rochard emphasized that regulators should not finalize rules governing Bitcoin-related operations without a transparent explanation of the fundamentals and supporting data. In a formal submission on March 29 to the US Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency, he expressed concerns that the proposed regulatory reforms, introduced on March 19, neglected to mention Bitcoin or any digital assets.

The revisions are designed to comprehensively restructure existing banking capital guidelines but do not elucidate how they apply to Bitcoin holdings, lending practices, custody services, and derivative transactions. Current Basel regulations impose stringent capital requirements on certain unsupported crypto assets, yet the US proposals remain silent on their implications for Bitcoin activities.

Rochard noted the criticality of providing clear direction on this front to avoid increasing legal vulnerabilities for banks.

“The fiat system should stop sabotaging itself. Bitcoin banking regulations would enhance bank interest margins and reduce borrowing costs,” Rochard stated on X.

An absence of firm guidelines will lead banks to interpret the existing rules variably, fostering uncertainty throughout the financial landscape.