Lummis-led group urges Fed, FDIC, OCC to replace Basel’s 1,250% risk weight with calibrated framework
A group of Senate Republicans led by Cynthia Lummis, chair of the Senate Banking Subcommittee on Digital Assets, is pressing the Federal Reserve, FDIC, and OCC to develop a clearer capital framework for banks’ crypto activities, arguing that international Basel Committee standards are overly punitive and misaligned with regulatory progress.
The Republicans, including Senators Dan Sullivan, Bill Hagerty, Bernie Moreno, Ted Budd, and Jon Husted, sent a letter to regulators objecting to the Basel Committee on Bank Supervision’s 1,250% risk weight classification for crypto assets. That weight determines how much capital banks must hold against the asset.
“This classification was not derived from a calibrated assessment of the actual risk profile of digital assets,” the senators wrote. “Instead, it appears to be a blanket penalty assigned by asset category as a de facto ban on banks holding this asset class, in direct tension with a technology-neutral approach.”
The letter targets a structural gap: while the FDIC, OCC, and Federal Reserve jointly stated in March that tokenized securities should receive the same capital treatment as non-tokenized counterparts, reflecting underlying asset risk rather than recording technology, no comparable framework exists for other crypto assets. The senators argue that principle should extend broadly.
“That principle should apply consistently, including to other digital assets,” they wrote.
Jonathan Gould, Comptroller of the Currency, signaled openness to the argument during recent testimony before the House Financial Services Committee. “Our job is to facilitate, not stymie, responsible innovation,” Gould said. He added: “Our banking system will only remain relevant and trusted if it resists pressures to deny access based on political or religious beliefs or lawful business activity.”
The OCC and FDIC have disclosed a technology-neutral approach over the past year. The OCC is returning to risk-based supervision and reviewing past supervisory criticisms and enforcement actions. The FDIC has issued proposed rules to regulate subsidiaries approved to issue payment stablecoins under the GENIUS Act.
The senators frame their request as building on recent progress. The letter does not specify what changes to capital treatment they expect, but the underlying argument is direct: Basel’s blanket 1,250% weight ignores actual risk and functions as a regulatory barrier rather than a safety measure.
The OCC is also investigating complaints of alleged debanking consistent with the President’s executive order, though the agency has not disclosed which institutions or specific complaints are under review.
Crypto market capitalization stands at $2.18 trillion on the week-long chart, providing context for the scale of assets potentially affected by capital rule changes.
