Index Rules, National Security and Crypto Treasuries

Overview

A prominent public company with a large bitcoin treasury has urged MSCI to reconsider a proposal that would exclude firms holding substantial digital-asset balances from widely used indices. In a detailed submission to the index provider, the company warned that such a move could undermine U.S. policy goals, distort capital markets and raise national security concerns amid the evolving regulatory landscape of 2025.

What MSCI proposed

MSCI opened a consultation this year considering index eligibility criteria for firms whose balance sheets include material holdings of digital assets. One option under discussion would exclude companies whose digital assets comprise 50% or more of total assets from certain index products used by institutional investors and passive funds.

The change is intended to ensure index constituents meet investors’ expectations for balance-sheet composition and risk profiles. But it has prompted strong pushback from affected firms and market observers who argue the threshold is arbitrary and could produce unintended market consequences.

Key arguments from the treasury firm

In a comprehensive appeal, the bitcoin-holding company made several central points:

• Index neutrality: Index providers should apply neutral, consistent standards that reflect market evolution rather than effectively discriminating against a single asset class.
• Company status: Firms that hold digital assets as part of their operating balance sheet are operating companies, not investment funds, and should be evaluated accordingly.
• Arbitrary threshold: A fixed 50% cutoff is described as arbitrary, potentially discriminatory and difficult to apply across diverse business models.
• Policy and security implications: Exclusionary index rules at a time of deliberate U.S. policy support for blockchain and crypto innovation could undercut federal goals and carry national security implications.

National security and policy context in 2025

2025 has been a pivotal year for crypto policy in the United States. Federal discussions have moved beyond narrow financial-stability questions to deliberate frameworks that balance innovation, financial integrity and strategic technology competition.

Key features of the 2025 policy environment include:

• Greater emphasis on regulating stablecoins and digital payments, with legislation that strengthens anti-money-laundering controls while enabling new products.
• A public stance from policymakers that positions digital-asset adoption as part of maintaining a technological edge relative to geopolitical competitors.
• Heightened scrutiny of how financial tools can be used to evade sanctions or illicit flows, leading to requirements for stronger compliance and monitoring.

Against this backdrop, the treasury firm argued that removing companies with substantial bitcoin holdings from major indices would contradict broader government goals to foster clarity, compliance and adoption of digital innovation.

Market reaction and potential investor impact

Index inclusion often matters more than meets the eye. Broad-market and sector indices are used as benchmarks by passive funds, ETFs and many institutional strategies. Changes to index eligibility can therefore have ripple effects.

• Passive capital flows: Exclusion from core indices can force passive funds tracking those indices to sell shares of affected companies, potentially creating significant near-term outflows.
• Liquidity and valuation: Forced rebalancing can reduce liquidity and exert downward pressure on share prices for companies excluded from major benchmarks.
• Corporate financing: Lower public valuations and index absence may raise the cost of capital and make strategic financing more expensive for firms with large digital-asset treasuries.
• Broader crypto market: If corporate holders are pushed to reduce or sell digital-asset positions to comply with index rules, price discovery and market liquidity for bitcoin and related assets could be affected.

Analysts have highlighted that potential outflows tied to index exclusion could be measured in the billions for large, publicly traded corporate bitcoin holders. The exact magnitude would depend on index weightings, fund tracking fidelity and secondary-market liquidity at the time of any reconstitution.

Index governance and neutrality concerns

The treasury company’s letter also flagged reputational and governance risks for index providers. Indexes play a central role in capital allocation and must be perceived as neutral arbiters of market representation.

Points raised include:

• Appearance of bias: Rules that single out one asset class may be seen as policy-driven rather than methodologically grounded, potentially undermining confidence among regulators and investors.
• Precedent risk: Establishing a rule that excludes firms based on balance-sheet composition could invite additional carve-outs for other emerging asset classes, complicating index maintenance.
• Transparency and consultation: The firm urged thorough, transparent consultation with market participants to ensure criteria reflect economic realities and are operationally practicable.

Possible alternatives for index providers

Rather than a blanket exclusion, index providers have options to balance investor protection and market representation. Possible alternatives include:

• Graduated thresholds: Implement tiered treatments or disclosure-based adjustments instead of a single hard cutoff.
• Dedicated indices: Create specialized indices or sub-indices for companies with material digital-asset holdings to avoid contaminating broad-market benchmarks.
• Enhanced disclosure: Require standardized reporting on digital-asset accounting, custody, and risk-management practices to enhance comparability.
• Risk-adjusted weighting: Apply risk overlays or adjusted weightings to better reflect balance-sheet concentration without full exclusion.

Corporate perspectives and communications

Affected firms have taken steps to engage with index providers, regulators and investors. Actions observed in 2025 include public comment letters, investor outreach campaigns and calls for clearer accounting and regulatory guidance.

These engagements underscore a broader industry trend toward proactive governance: companies are seeking to demonstrate compliance, robust custody arrangements and transparent policies to mitigate investor concerns.

Regulatory interplay: what to watch

Several regulatory and market developments in late 2025 will shape the outcome of this consultation and related debates:

• Accounting standards: Clarifications on how digital assets are reported on corporate balance sheets could change the practical implications of any threshold.
• Regulatory guidance: Additional rules from financial regulators on custody, disclosures and operational resilience may reduce perceived risks associated with corporate crypto holdings.
• Index provider responses: The design choices and rationale published by index providers will set market expectations and influence institutional investment policies.
• Investor behavior: How passive and active managers respond—whether by adjusting mandates, seeking alternatives, or engaging with issuers—will determine real-world impacts.

Market outlook for 2026 and beyond

As the market moves into 2026, several dynamics will be central:

• Institutional adoption is likely to continue if regulatory frameworks clarify custody, reporting and compliance requirements.
• Index methodology debates will intensify as asset classes evolve, requiring providers to balance representation with investor protection.
• Corporate strategies may shift to reconcile treasury management with capital-markets considerations, potentially using hedging or diversification to manage volatility exposure.

The interaction between policy, index design and corporate action will ultimately determine whether digital-asset treasuries remain a mainstream corporate strategy or become a niche profile for specialized indices.

Conclusion

The dispute between a major bitcoin-treasury company and an index provider highlights how technical decisions about index rules can have wide-ranging policy, market and security implications. In 2025, as governments and markets navigate digital-asset integration, index governance will be a key battleground for determining how innovation and investor protection are reconciled.

For investors and market participants, the immediate takeaway is to monitor regulatory clarifications, index-provider consultations and corporate disclosures closely. Those developments will shape portfolio construction, benchmark usage and the broader trajectory of institutional digital-asset involvement into 2026.

Disclaimer: This post is a compilation of publicly available information.
MEXC does not verify or guarantee the accuracy of third-party content.
Readers should conduct their own research before making any investment or participation decisions.