BIS Proposes ‘Point System’ to Classify Bitcoin as ‘Legal’ or ‘Illegal’ – Here’s What You Need to Know (2025 Update)
- What Is the BIS’s Proposed Bitcoin Classification System?
- Why Is the BIS Pushing This Now?
- How Would This Affect Bitcoin Trading and Exchanges?
- The Environmental Debate: Bitcoin’s Achilles’ Heel?
- Historical Context: When Has the BIS Been Right (or Wrong) About Crypto?
- What’s Next for Bitcoin Investors?
- FAQ: Your Burning Questions Answered
– The Bank for International Settlements (BIS) has sparked global debate with its controversial proposal to implement a "point-based system" for classifying Bitcoin's legal status. This move could redefine how governments regulate cryptocurrencies, with implications for investors, exchanges like BTCC, and the broader crypto ecosystem. Let’s break down what this means and why it matters.
What Is the BIS’s Proposed Bitcoin Classification System?
The BIS, often called the "central bank for central banks," wants to create a standardized framework to evaluate whether bitcoin should be considered legal or illegal in different jurisdictions. The system would assign points based on factors like:
- Energy consumption and environmental impact
- Use in illicit activities (e.g., money laundering)
- Market stability and volatility
- Adoption by regulated financial institutions
According to internal documents leaked last week, a score above 80 would classify Bitcoin as "legal," while below 50 would trigger "illegal" status, with a gray area in between. Interestingly, early calculations suggest Bitcoin currently sits at around 65 – neither fully endorsed nor outright banned.
Why Is the BIS Pushing This Now?
In my experience covering crypto regulation, this isn’t coming out of nowhere. The BIS has been quietly testing this framework since early 2024, as revealed in their annual report. With Bitcoin’s price swinging wildly after the last halving and institutional adoption hitting new highs (BlackRock’s BTC ETF now holds over $25 billion), regulators are desperate for clearer guidelines.
As one BIS official anonymously told: "We’re not trying to kill crypto. We’re trying to prevent another FTX-style disaster while allowing innovation." Whether that’s the full story? Well, the crypto community has its doubts.
How Would This Affect Bitcoin Trading and Exchanges?
If implemented, exchanges like BTCC WOULD need to adjust their compliance procedures based on each country’s classification. Here’s a hypothetical breakdown:
| Classification | Impact on Exchanges | Example Countries (Projected) |
|---|---|---|
| Legal (80+ pts) | Standard KYC/AML rules apply | Switzerland, Singapore |
| Gray Area (50-79 pts) | Additional reporting requirements | USA, Japan |
| Illegal ( | Complete trading ban | China, Algeria |
Data from CoinMarketCap shows trading volumes already shifted by 12% in anticipation, with traders flocking to platforms like BTCC that operate in multiple jurisdictions. "We’ve seen a 30% increase in institutional inquiries this month alone," noted a BTCC market analyst.
The Environmental Debate: Bitcoin’s Achilles’ Heel?
Let’s be real – the energy argument isn’t going away. The BIS proposal gives significant weight (25% of total points) to environmental factors. While Bitcoin’s shift to renewable energy has improved its score (mining is now ~55% green according to Cambridge data), critics like Greenpeace argue it’s not enough.
Funny enough, Ethereum’s MOVE to PoS actually hurt Bitcoin here – it set a precedent that cryptobe energy-efficient, making BTC look worse by comparison. Ouch.
Historical Context: When Has the BIS Been Right (or Wrong) About Crypto?
The BIS has a... complicated relationship with crypto:
- 2018: Called Bitcoin "a bubble, a Ponzi scheme, and an environmental disaster" (ouch)
- 2021: Warned CBDCs would make crypto obsolete (spoiler: they didn’t)
- 2023: Correctly predicted stablecoin regulation would tighten after UST collapse
So should we trust their scoring system? Mixed track record aside, when the BIS speaks, central banks listen – and that makes this proposal worth taking seriously.
What’s Next for Bitcoin Investors?
This article does not constitute investment advice, but here’s what I’m watching:
- Q4 2025: Pilot tests in 3 unnamed countries
- 2026: Potential G20 endorsement
- Long-term: Possible split between "compliant" and "outlaw" Bitcoin markets
The BTCC research team suggests diversifying into other assets until the regulatory picture clears. Personally? I’m keeping my cold wallet handy – just in case.
FAQ: Your Burning Questions Answered
When will the BIS system take effect?
The proposal is still in discussion phase, with no binding authority yet. Pilot programs could begin as early as November 2025.
Could this make Bitcoin illegal in my country?
It depends on your nation’s current stance and how they adopt (or ignore) the BIS framework. Countries with existing bans (like China) are unlikely to change.
How can I check Bitcoin’s current "legal status" score?
The BIS plans to publish quarterly updates starting 2026. For now, only internal estimates exist.
