US Senators Demand Clarification on Cryptocurrency Capital Rules

A group of Republicans in the US Senate has called on financial regulators to clarify capital standards for companies dealing in crypto assets. Led by Senator Cynthia Lummis, the group sent an official letter to Federal Reserve Vice Chair Michelle Bowman, Federal Deposit Insurance Corporation Chairman Travis Hill, and Office of the Comptroller of the Currency representative Jonathan Gould. As reported by Cointelegraph.com reports .

In their appeal, the senators welcomed guidance on tokenized securities while urging the creation of a clearer and fairer system for reflecting digital assets on balance sheets. Under current international standards, banks are required to hold reserve assets worth significantly more than their crypto holdings. The senators describe this as a "de facto ban" on banks holding crypto.

This initiative coincides with preparations to review the CLARITY Act, a bill that would define federal agencies' regulation of the crypto market. The current draft of the law allows banks to use digital assets and blockchain technology in operations such as payments, lending, custody, and trading.

The group objected to the Basel Committee's 1,250% risk weight for crypto assets. In their view, this figure is not based on the actual risk profile of digital assets. The senators emphasize that any new regulations must be technologically neutral and allow banks to participate meaningfully in the digital asset market.

The letter was also signed by Senators Dan Sullivan, Bill Hagerty, Bernie Moreno, Ted Budd, and Jon Husted. Debates on the CLARITY Act are expected to continue in the Senate this week. The bill also defines the authority of agencies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission in the crypto market.