Senate Republicans urged financial regulators to rework bank capital rules for digital assets
A group of Senate Republicans led by Sen. Cynthia Lummis is pressing key financial regulatory agencies to clarify capital standards for digital assets.
Regulators should work on a fresh capital framework for digital assets, they said in a letter sent last week to Federal Reserve Vice Chair of Supervision Michelle Bowman, Federal Deposit Insurance Corporation Chair Travis Hill, and Comptroller of the Currency Jonathan Gould. All three are testifying in front of the House Financial Services Committee on Thursday morning.
A statement on the letter was released on Thursday.
The lawmakers criticized standards from the international Basel Committee on Bank Supervision, published over the years, that assigned a "1,250% risk weight" on digital assets. Risk weight is used to figure out how much a bank has to hold against a certain asset, so riskier assets require more capital buffers.
Part of the Bank for International Settlements, the Basel Committee is a global standard-setting body composed of 45 central banks and banking supervisors, including U.S. regulators.
"Any proposed capital treatment of on-balance sheet digital asset activities should accurately reflect the opportunities and risks of digital assets—and be based on, to the extent possible, a technology-neutral approach that gives banks the authority to participate meaningfully in digital asset markets," the lawmakers said in the letter.
Sens. Lummis, Dan Sullivan, Bill Hagerty, Bernie Moreno, Ted Budd, and Jon Husted signed the letter.
The letter also references a joint statement from March from the FDIC, the central bank, and the OCC that clarified that tokenized securities should, in general, have the same treatment in capital as non-tokenized forms of the asset.
"That principle should apply consistently—including to other digital assets," the lawmakers said.
The push comes as Congress considers broader digital asset legislation that would broaden banks' ability to engage in balance-sheet digital asset activities.
"This legislation authorizes banks to engage in a number of on-balance sheet activities with digital assets, which will undoubtedly require capital guidance," the senators said.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Balancer eyes wind-down after restructuring fails to revive revenue
Is a new wave of sell-offs approaching? The ultimate rival of the AI bull market emerges—The "global anchor of asset pricing" breaks through the 5% super threshold
After the 10-year US Treasury yield breaks back above the critical 5% mark, it is more likely to usher in a period of high-level tug-of-war and accelerated asset differentiation. Especially before energy shocks and the significantly eased large-scale expansion of the US fiscal deficit, the conditions to quickly replicate the sharp yield decline seen at the end of 2023 are not yet fully in place.
Anthropic releases another article: What will the economy look like in the AI era?
Anthropic's economics team has released an AI economic scenario model, centered around three scenarios: moderate and gradual growth, transformative changes with GDP doubling, and an extreme situation with 15% annual growth but massive job losses among knowledge workers. The model treats work as "bundles of tasks" and analyzes AI’s enhancement and substitution effects on different types of tasks. Anthropic emphasizes that the economic outlook for 2030 is not predetermined; the key lies in how the dividends from AI are widely shared.
"New Federal Reserve News Agency": Waller's Rate Hike "Has No Way Back", Trump's "Trust" Faces Test
Nick Timiraos believes that after the higher-than-expected August CPI, the probability of the Federal Reserve raising interest rates this week has surged, while Waller’s hawkish stance on inflation has left himself almost "no leeway." With seven weeks before the election, whether or not Waller raises rates will directly test how long Trump's “trust” in him can last. Previously, Waller maintained a balance between the White House and the Federal Reserve by “talking less and avoiding provocation,” but after this meeting, silence will no longer serve as his shield.
Crypto prices
More
