US Senators Challenge Bitcoin Capital Rule That Could Block Bank Participation

A push by US senators to overhaul bank capital rules governing digital assets could have significant implications for institutional bitcoin adoption.

At the center of the debate is a Basel framework that assigns certain cryptoasset exposures a 1,250% risk weight. Critics argue that this treatment is too stringent and makes it economically impractical for banks to participate in bitcoin markets.

The senators, led by Cynthia Lummis (R-WY), have urged regulators to revisit digital asset capital standards. They praised the recent treatment of tokenized securities, which bases capital requirements on the underlying asset.