A bipartisan group of US Senators pushed for clearer and more equitable capital requirements for banks involved in cryptocurrency activities, criticizing existing international standards as unduly harsh. The senators addressed a letter to key banking regulators, including the Federal Reserve, FDIC, and the Office of the Comptroller of the Currency (OCC), calling for regulatory reforms that reflect the actual risk profile of crypto assets rather than applying blanket penalties.
Current guidelines from the Basel Committee on Bank Supervision impose a steep 1,250% risk weight on crypto assets, which translates into banks needing to hold disproportionately large capital reserves. The senators argue this figure effectively amounts to a ban on banks holding cryptocurrencies, undermining a technology-neutral supervisory approach that regulators have signaled in their recent communications.
Highlighting progress on the treatment of tokenized securities, the letter praised the interagency guidance jointly issued by the FDIC, OCC, and Federal Reserve. This guidance established that tokenized securities should receive capital treatment aligned with their traditional counterparts, reflecting the underlying asset's risk rather than the technology used for ownership. The senators urged regulators to extend this logic consistently to other digital assets to foster a balanced regulatory environment.
This message arrived alongside testimonies by the FDIC Chair and other regulators before the House Financial Services Committee, where they outlined plans to revisit bank regulations introduced after the 2008 financial crisis. The regulators expressed intentions to shift toward a more risk-based supervisory framework aiming for efficiency while maintaining financial stability.
The senators also pointed to ongoing legislative efforts to expand banks’ ability to engage meaningfully in crypto asset activities on their balance sheets. They encouraged regulators to build on recent advances and develop a comprehensive capital framework that supports responsible crypto engagement by banks without imposing undue barriers.