Saylor Calls for Bank Rules Change to Let Lending Against Bitcoin

Michael Saylor, Executive Chairman of Strategy Inc., has proposed rules that would allow banks to lend against Bitcoin. In a September 26 policy essay, he argued that banks should be able to hold the asset for customers and extend credit against it. This move could provide more ways for Bitcoin owners to borrow or obtain custody services.

Saylor views Bitcoin as 'Digital Capital' and believes that bank adoption will drive industry growth. He argues that banks face different risks when safeguarding an asset, lending against it, or buying it for their own balance sheets. Saylor calls for a review of accounting, supervisory, and capital rules that he believes make Bitcoin services unnecessarily difficult.

The Basel framework's 1,250% risk weight for Group 2b cryptoasset exposures is cited as an example of overly restrictive regulation. Saylor wants policymakers to assess the activity and its actual risks when setting requirements. He proposes a regulatory path that he considers commercially workable, which would allow banks to evaluate collateral, protect customer assets, and manage losses.