Republican Senators Challenge Crypto Capital Rules as Congress Debates Digital Asset Framework

Wyoming Senator Cynthia Lummis leads a Republican push against what they call excessive capital requirements for banks dealing with crypto assets. The group argues current Basel Committee rules impose a punitive 1,250% risk weighting that effectively bars regulated institutions from digital asset markets.

In letters to top financial regulators, the senators cite tokenized securities as precedent for more nuanced risk assessment. Their intervention comes as Congress prepares major digital asset legislation, creating tension between legislative and regulatory approaches.

The Basel Committee's blanket treatment of crypto assets contrasts with growing institutional adoption. Major banks now custody crypto while asset managers launch spot Bitcoin ETFs - developments at odds with regulatory capital frameworks designed for a pre-blockchain era.