Key facts
- Senate Republicans urged federal banking regulators to create fair capital rules for digital asset activities.
- Lawmakers criticized Basel Committee rules assigning a 1,250% risk weight to some crypto assets.
- They called for a technology-neutral approach to digital asset capital standards.
- Regulators previously provided guidance that tokenized securities generally receive the same capital treatment as traditional securities.
- Banks need clear rules to expand on-balance sheet crypto services, holding capital for real risks.
- The push comes as Congress reviews broader crypto market legislation.
Senate Republicans have urged federal banking regulators to create fair capital rules for digital asset activities, arguing that current standards limit banks through harsh capital treatment. This push adds pressure as Congress reviews broader crypto market legislation. Senator Cynthia Lummis, along with five Republican colleagues, sent a letter to Federal Reserve Vice Chair for Supervision Michelle Bowman, FDIC Chair Travis Hill, and Comptroller Jonathan Gould. The letter criticizes Basel Committee rules that assign a 1,250% risk weight to some crypto assets, stating this standard treats the asset class as too risky without proper calibration and effectively acts as a bank ban. The senators advocate for U.S. regulators to adopt a technology-neutral approach, similar to recent guidance where tokenized securities received the same capital treatment as traditional securities. They argue that banks require clear rules before expanding on-balance sheet crypto services, emphasizing that capital should reflect real risks rather than blanket penalties. The lawmakers believe fair standards would support lawful participation in digital asset markets and that agencies must prepare capital guidance before banks receive broader authority for crypto activities. The letter reflects growing Republican pressure on regulators to ease bank participation in digital asset markets, with the senators stating that rules should balance risks and opportunities and not block regulated crypto services, preventing activity from moving outside supervised channels.