As of February 23, 2026, new Basel III "Endgame" regulations have officially reclassified how banks hold precious metals, placing them in direct competition with U.S. Treasuries for a spot on bank balance sheets
According to the endgame rule, if US banks can hold gold on their balance sheet.
a. Tier 1 asset---high quality and high liquidity. If they hold physical gold, no hair cut of the value, 100% , as how treasury is treated;
b. 0 Risk--will be treated as 0% risk, as how treasury is treated.
c. counterpart risk---gold has now counter part risk,yet treasury has, which is the issurers;
d. but income potential--no income for holding gold (it has storage cost), yet treasury is paying interest.
In short, the physical gold or spot is reclassified as tier 1 asset
