{"id":73665,"date":"2026-06-07T01:14:53","date_gmt":"2026-06-07T01:14:53","guid":{"rendered":"https:\/\/crowdfundjunction.com\/blog\/6-senators-challenge-1250-bitcoin-capital-rule-they-say-blocks-banks-from-crypto\/"},"modified":"2026-06-07T01:14:53","modified_gmt":"2026-06-07T01:14:53","slug":"6-senators-challenge-1250-bitcoin-capital-rule-they-say-blocks-banks-from-crypto","status":"publish","type":"post","link":"https:\/\/crowdfundjunction.com\/blog\/6-senators-challenge-1250-bitcoin-capital-rule-they-say-blocks-banks-from-crypto\/","title":{"rendered":"6 Senators Challenge 1,250% Bitcoin Capital Rule They Say Blocks Banks From Crypto"},"content":{"rendered":"<p><b>(Originally posted on : Bitcoin News )<\/b><br \/>\n<\/p>\n<div>\n<div class=\"@container mb-[25px] rounded-sm overflow-clip py-0.5 pr-0.5 pl-2.5 bg-success-100\">\n<div class=\"flex flex-col gap-m overflow-clip rounded-[6px] !bg-success-10 p-3 @[420px]:p-m\">\n<h2 class=\"m-0 flex items-center gap-s text-[19px] !text-[#1c1c1c] md:text-[20px]\"><svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"16\" height=\"10\" viewbox=\"0 0 16 10\" fill=\"none\" class=\"shrink-0 text-success-100\" aria-hidden=\"true\"><path d=\"M1 1.5h14\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><path d=\"M1 8.5h10\" stroke=\"currentColor\" stroke-width=\"2.5\" stroke-linecap=\"round\"\/><\/svg><span>Key Takeaways<\/span><\/h2>\n<ul class=\"m-0 flex list-none flex-col gap-m pl-0\">\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Senators urged regulators to revisit digital asset capital standards affecting banks.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">The disputed 1,250% risk weight can require capital equal to exposure.<\/span><\/li>\n<li class=\"m-0 flex items-start gap-s !text-[#434248]\"><span class=\"mt-2 size-2 shrink-0 rounded-full bg-success-100\" aria-hidden=\"true\"\/><span class=\"text-body\">Potential rule changes could reshape institutional participation in bitcoin markets.<\/span><\/li>\n<\/ul>\n<\/div>\n<\/div>\n<h2>Senate Pressure Builds Over Bank Rules That Could Shape <span>Bitcoin<\/span> Access<\/h2>\n<p>U.S. senators disclosed on June 4 a renewed push to overhaul bank capital rules governing digital asset exposure. At the center of the debate is a Basel framework that assigns certain cryptoasset exposures a <a href=\"https:\/\/news.bitcoin.com\/strategy-ceo-calls-for-rethink-of-basels-1250-bitcoin-risk-capital-treatment\/\">1,250% risk weight<\/a>, a treatment critics say makes bank participation in <span>bitcoin<\/span> markets economically impractical.<\/p>\n<p>For investors, banks, and <span>crypto<\/span> firms, the issue could influence how deeply traditional finance enters <span>bitcoin<\/span> markets.<\/p>\n<p>A May 27 <a href=\"https:\/\/www.lummis.senate.gov\/wp-content\/uploads\/Digital-Asset-Capital-Standards-Letter-Final.pdf\" target=\"_blank\" rel=\"noopener noreferrer\">letter<\/a> from Senators Cynthia Lummis (R-WY), Dan Sullivan (R-AK), Bill Hagerty (R-TN), Bernie Moreno (R-OH), Ted Budd (R-NC), and Jon Husted (R-OH) urged the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) to revisit digital asset capital standards. The lawmakers praised regulators\u2019 recent treatment of tokenized securities, which bases capital requirements on the underlying asset.<\/p>\n<p>The senators explained:<\/p>\n<blockquote>\n<p>\u201cA 1,250% risk weight, multiplied by the 8% minimum capital ratio, produces a capital requirement equal to 100% of the exposure\u2014requiring banks to hold capital more than dollar for dollar equal to the amount of the digital assets.\u201d<\/p>\n<\/blockquote>\n<p>The Basel framework sorts bank <span>crypto<\/span> exposures into risk groups. Tokenized traditional assets and qualifying <span>stablecoins<\/span> can receive lower capital treatment. Unbacked assets, including <span>bitcoin<\/span>, can fall into a higher-risk bucket. That category receives the 1,250% risk weight when exposures fail the framework\u2019s safeguards. The result ties bank capital costs to asset classification, market risk, <span>liquidity<\/span>, hedging, and operational controls.<\/p>\n<figure id=\"attachment_820607\" aria-describedby=\"caption-attachment-820607\" style=\"width:1024px\" class=\"wp-caption aligncenter\"><figcaption id=\"caption-attachment-820607\" class=\"wp-caption-text\">Under the Basel framework, <span>bitcoin<\/span> is generally subject to a 1,250% risk weight. Source: Strive Chief Risk Officer Jeff Walton.<\/figcaption><\/figure>\n<h2>Regulators Face Growing Calls to Reassess <span>Crypto<\/span> Capital Standards<\/h2>\n<p>The lawmakers said the Basel approach conflicts with the technology-neutral treatment regulators recently applied to tokenized securities. They argued that regulators should evaluate each asset\u2019s underlying risk. That distinction could become increasingly important as banks explore <span>BTC<\/span> custody, balance-sheet exposure, settlement services, and other digital asset activities.<\/p>\n<p>Recent actions by the Fed, FDIC, and OCC suggest regulators are already reassessing aspects of their digital asset approach. In March, the agencies <a href=\"https:\/\/news.bitcoin.com\/federal-banking-agencies-clarify-capital-rules-for-tokenized-securities-signaling-tech-neutral-approach\/\">clarified<\/a> that eligible tokenized securities generally receive the same capital treatment as traditional securities. Regulators have also withdrawn or revised several supervisory expectations that previously required banks to obtain advance approval before certain permissible crypto-related activities.<\/p>\n<p>The senators wrote:<\/p>\n<blockquote>\n<p>\u201cWe encourage you to begin work on a new capital framework for digital asset activities.\u201d<\/p>\n<\/blockquote>\n<p>Critics outside the banking industry have raised similar concerns. The <span>Bitcoin<\/span> Policy Institute made a similar case in a recent paper titled Basel\u2019s 1250% Mistake. The organization argued that Basel\u2019s 1,250% risk weight applies a penalty designed for opaque securitization tranches to <a href=\"https:\/\/www.binance.com\/en\/price\/bitcoin\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">bitcoin<\/a>, despite <a href=\"https:\/\/www.binance.com\/en\/price\/bitcoin\/\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">BTC<\/a> trading in transparent global markets. It said <a href=\"https:\/\/www.binance.com\/en\/price\/bitcoin\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">bitcoin<\/a>\u2019s market, custody, and operational risks can be measured through existing Basel frameworks. The paper also argued that U.S. regulators should help shape Basel\u2019s targeted review, rather than import a flawed standard as demand for regulated <a href=\"https:\/\/www.binance.com\/en\/price\/bitcoin\" class=\"lar_link lar_link_outgoing\" target=\"_blank\" rel=\"noopener noreferrer\">bitcoin<\/a> services grows.<\/p>\n<\/p><\/div>\n<p><a href=\"https:\/\/news.bitcoin.com\/6-senators-challenge-1250-bitcoin-capital-rule-they-say-blocks-banks-from-crypto\/\">Source link <\/a><br \/>\n<br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>(Originally posted on : Bitcoin News ) Key Takeaways Senators urged regulators to revisit digital asset capital standards affecting banks. The disputed 1,250% risk weight can require capital equal to exposure. Potential rule changes could reshape institutional participation in bitcoin markets. Senate Pressure Builds Over Bank Rules That Could Shape Bitcoin Access U.S. senators disclosed [&hellip;]<\/p>\n","protected":false},"author":11,"featured_media":73666,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0},"categories":[32],"tags":[],"_links":{"self":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/73665"}],"collection":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/comments?post=73665"}],"version-history":[{"count":0,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/posts\/73665\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media\/73666"}],"wp:attachment":[{"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/media?parent=73665"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/categories?post=73665"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/crowdfundjunction.com\/blog\/wp-json\/wp\/v2\/tags?post=73665"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}