US senators urge banking regulators to ease crypto capital rules
Six Republican senators asked U.S. banking regulators to craft new digital-asset capital standards, citing Basel treatment of Bitcoin and calling for clarity on tokenized securities as banks seek a larger crypto role.
Six U.S. Republican senators led by Cynthia Lummis urged banking regulators to provide clear and fair capital rules for digital assets, saying the current framework effectively makes it difficult for banks to hold Bitcoin on their balance sheets. In a May 27 letter disclosed on June 4, the lawmakers asked the Federal Reserve Board, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency to address the treatment of crypto assets and tokenized securities. They highlighted Basel rules that assign Bitcoin a 1,250% risk weight, a requirement that can make direct bank exposure prohibitively capital-intensive. The intervention comes as Congress advances legislation that could broaden banks' role in crypto markets, intensifying debate over how regulated lenders should account for digital-asset risk.
- capital rules: Banking requirements that determine how much capital lenders must hold against particular assets and exposures.
- tokenized securities: Traditional securities represented in digital form using token-based infrastructure.
- risk weight: A regulatory measure used to calculate how much capital a bank must hold against a specific asset.