Key facts
- Senate Republicans sent a letter to the Federal Reserve, FDIC, and OCC requesting new capital rules for crypto activities.
- The senators criticized the Basel Committee's 1,250% risk weight for crypto assets as overly punitive.
- They applauded recent interagency guidance on tokenized securities, which treated them similarly to non-tokenized counterparts.
- The lawmakers urged regulators to apply the same principle of risk-based treatment to other digital assets.
- Regulators are reportedly shifting towards risk-based supervision and reviewing past rules.
A group of US Senate Republicans, led by Senator Cynthia Lummis, has formally requested that key financial regulators—the Federal Reserve, FDIC, and OCC—develop a clearer and fairer capital framework for banks engaging with crypto assets. In a letter addressed to regulators Miki Bowman, Travis Hill, and Jonathan Gould, the senators criticized the Basel Committee on Bank Supervision's current capital standards, which assign a 1,250% risk weight to crypto assets. They argued this classification is not based on a calibrated assessment of risk but acts as a de facto ban, contradicting a technology-neutral approach. The lawmakers acknowledged and applauded recent interagency guidance that provided a risk-based capital treatment for tokenized securities, urging regulators to apply this principle consistently to other digital assets. The call for new rules comes as these regulators are testifying before the House Financial Services Committee about their efforts to revise post-2008 financial crisis bank rules, with FDIC Chair Travis Hill emphasizing strong capital standards and the OCC Chief affirming a return to risk-based supervision to facilitate responsible innovation. The senators noted that pending legislation would expand banks' ability to hold digital assets on their balance sheets, requiring clear capital guidance.