Senate Republicans Ask Regulators to Clarify Crypto Bank Capital
Senate Republicans led by Sen. Cynthia Lummis on May 27 urged the Fed, FDIC and OCC to clarify bank capital rules for crypto, calling Basel’s 1,250% risk weight a de facto ban.
On May 27, a group of Senate Republicans led by Sen. Cynthia Lummis sent a letter to Federal Reserve Vice Chair for Supervision Miki Bowman, FDIC Chairman Travis Hill and Comptroller of the Currency Jonathan Gould asking for clearer capital rules for banks that hold or use digital assets.
The letter criticized the Basel Committee on Banking Supervision’s 1,250% risk weight for crypto holdings, saying the standard forces banks to hold many times the value of their digital-asset positions in reserve capital and amounts to a de facto ban on on-balance-sheet crypto activity.
Lawmakers praised March guidance from the agencies that clarified capital treatment for certain tokenized securities and urged regulators to expand that work. The letter asked regulators to provide consistent, technology-neutral capital rules covering custody, trading, lending and the use of blockchain for payments.
The senators called for a new capital framework that reflects both risks and potential benefits of digital assets and requested that agencies begin work now, noting any enacted legislation would require agency guidance. The request comes as the Senate prepares to act on the CLARITY Act, which would define which federal agencies regulate crypto and would allow banks to use digital assets for payments, lending, custody and trading.
Both the Senate Banking and Agriculture Committees have advanced separate versions of crypto legislation that the full Senate will need to reconcile. Lawmakers identified outstanding issues that must be resolved to secure the 60 votes needed to move a bill without extended debate, including rules for stablecoins, ethics provisions and protections for developers.
Senators Dan Sullivan, Bill Hagerty, Bernie Moreno, Ted Budd and Jon Husted joined Lummis in signing the May 27 letter. The group asked the Fed, FDIC and OCC to build on the March guidance and issue a clear, consistent capital framework so banks can assess the costs and benefits of offering crypto services without facing disproportionate capital requirements.
The material on GNcrypto is intended solely for informational use and must not be regarded as financial advice. We make every effort to keep the content accurate and current, but we cannot warrant its precision, completeness, or reliability. GNcrypto does not take responsibility for any mistakes, omissions, or financial losses resulting from reliance on this information. Any actions you take based on this content are done at your own risk. Always conduct independent research and seek guidance from a qualified specialist. For further details, please review our Terms, Privacy Policy and Disclaimers.
Articles by this author
