US Senators Advocate for New Capital Guidelines for Crypto Assets
- A coalition of US Senators, including Cynthia Lummis and Bill Hagerty, has urged federal regulators to revise capital guidelines for Bitcoin and other digital assets.
- The senators criticized the Basel Committee’s framework that assigns a risk weight of 1250% to Bitcoin, arguing it does not accurately reflect the asset’s risk profile.
- They noted that current rules require banks to hold capital equal to their digital asset exposure due to this high-risk classification.
- The letter emphasizes that risks associated with cryptocurrencies are measurable and can be managed using existing banking tools.
- This initiative coincides with the progress of the CLARITY Act, which aims to establish a clearer regulatory framework for digital assets.
The push for new regulations comes as lawmakers seek a technology-neutral approach that allows banks to engage in digital asset markets effectively. Senator Lummis hopes for a Senate vote on the CLARITY Act before the August recess.
The proposed changes could significantly impact how banks manage their capital requirements related to crypto, particularly given the current requirement equating capital holdings with exposure levels.(Source)
