This year, there's another major international policy boost: the Basel Committee on Banking Supervision might relax its scrutiny standards for cryptocurrencies. In the 2022 version of the Basel Accord, Bitcoin and other crypto assets were classified under the highest risk category, assigned an extreme risk weight of 1250%. What does this mean? Banks are required to maintain a minimum capital adequacy ratio of 8%, and 1250% multiplied by 8% equals exactly 100%. This means that for every $1 of Bitcoin a bank holds, it must reserve an equivalent $1 in cash—essentially negating Bitcoin's asset value. What about other assets? Gold and government bonds are at 0%, personal mortgages at 35%, corporate loans at 100%. Comparing these, Bitcoin's 1250% is just absurd. The Basel Accord essentially forces banks not to hold Bitcoin, let alone provide loans for Bitcoin! This is the same issue I mentioned in my previous post about Michael Saylor. Now you might ask, who the hell is the Basel Committee on Banking Supervision? It might sound obscure, but their authority is massive. The Basel Committee's 28 member jurisdictions include the U.S., EU, China, Japan, Singapore, and almost all developed countries, accounting for over 90% of global banking assets! Regulatory agencies in these countries are obligated to convert the standards set by the Basel Committee, like the Basel Accord, into domestic laws. The timing of the Basel Accord's creation coincided with the bear market bottom after the FTX collapse, when global sentiment towards Bitcoin was extremely negative. That's why such laws were passed to strictly limit Bitcoin's entry into the banking system. But now, with Bitcoin ETFs bringing Bitcoin back into the mainstream spotlight, the Basel Committee has realized that continuing to bind Bitcoin like this is no longer feasible. Last month, they issued a statement announcing a restart of Bitcoin reviews, with results to be released later this year. If the Clarity Act and Basel Accord amendments both pass smoothly this year, the banking industry will completely loosen its restrictions on Bitcoin. Banks will not only be able to custody Bitcoin but also use it as collateral for loans. For major Bitcoin holders like MicroStrategy, if they ever face cash flow pressure, they won't need to sell their coins to survive—they can simply use them as collateral for borrowing. This would significantly reduce the selling pressure from shadow banks offering revolving loans!