Six Republican senators have urged top US banking regulators to create a clearer and fairer framework for banks that hold digital assets on their balance sheets. In their letter, the lawmakers welcomed guidance issued in March on the capital treatment of tokenized securities, but said the rules remain unclear when banks directly hold digital assets.
Letter sent to the Fed, FDIC and OCC
The letter was addressed to Federal Reserve Vice Chair for Supervision Miki Bowman, Federal Deposit Insurance Corporation Chairman Travis Hill, and Acting Comptroller of the Currency Jonathan Gould. Senator Cynthia Lummis, one of the signatories, has been a leading voice in the Senate on cryptocurrency and digital asset policy. The group argued that capital requirements for on-balance-sheet digital assets should reflect both the opportunities and the risks attached to those assets.
The senators also called for a technology-neutral approach wherever possible, saying banks should be able to participate meaningfully in digital asset markets. Their position is that capital rules should not treat all crypto-related exposure in a way that blocks normal banking activity by default.
Basel crypto treatment draws direct criticism
The letter criticized current international standards on how banks hold crypto assets. According to the senators, the existing framework forces banks to hold more capital against crypto exposures than against comparable traditional asset positions, creating a strong disincentive for banks to hold digital assets at all.
They singled out the Basel Committee on Banking Supervision’s long-standing policy that assigns a 1,250% risk weight to crypto assets. In banking regulation, that risk weighting determines how much capital must be held against an asset. The senators said the figure does not represent a balanced reading of the actual risk profile of digital assets.
Timing lines up with renewed CLARITY Act debate
The letter arrived as the US Senate prepares to revisit the “CLARITY Act.” In its current form, the bill would allow banks to use digital assets and blockchain infrastructure for services including payments, lending, custody, and trading. Senate leadership is aiming to move the bill before the November midterm elections. If that effort stalls, the legislation may need to be introduced again in the next session of Congress.
With the Senate returning from recess this week, debate around the bill is expected to resume soon. Alongside Lummis, the letter was signed by Dan Sullivan, Bill Hagerty, Bernie Moreno, Ted Budd, and Jon Husted.
SEC-CFTC boundaries and the 60-vote hurdle
The proposed law is also designed to define how authority over crypto markets and businesses is divided between the Securities and Exchange Commission and the Commodity Futures Trading Commission. The Senate Banking Committee and Agriculture Committee have approved their own versions of the securities and commodities sections, but the full Senate still needs to reach a compromise.
The Senate bill is also expected to cover stablecoins, ethics concerns, and rules affecting crypto developers. To pass without procedural delays, it needs backing from 60 senators.