A group of Senate Republicans, led by Senator Cynthia Lummis, fired off a letter this week to the Federal Reserve, the FDIC, and the OCC demanding clear, fair capital rules for banks that want to touch crypto assets. The six lawmakers argue the current international standard—a 1,250% risk weight from the Basel Committee—acts as a de facto ban on banks holding digital assets. They want U.S. regulators to build a new framework that treats crypto like any other asset class, not as a pariah.
The 1,250% bone of contention
The senators didn't mince words about the Basel rule. They called it a 'punitive classification' that bears no relation to actual risk. In their view, slapping a flat 1,250% risk weight on all crypto assets is a blunt instrument that kills bank participation before it can start. The letter urges the Fed, FDIC, and OCC to develop a capital framework based on the principle of technology-neutral treatment—the same activity, the same risk, the same capital charge.
A nod to tokenized assets
The letter did give credit where they think it's due. The lawmakers applauded interagency guidance issued in March 2025 that said tokenized securities should get the same capital treatment as their non-tokenized counterparts. That guidance, the senators wrote, correctly reflects that the risk characteristics come from the underlying asset, not the tech wrapper. It's a small win for the industry's tokenization push, but the bigger fight is still about how to treat raw crypto like bitcoin or ether.
Hill and Gould testify on reforms
The regulatory push comes alongside fresh testimony from the agency heads. FDIC Chairman Travis Hill told lawmakers the agency is implementing reforms to build a more effective supervisory framework for digital assets. He also flagged that the FDIC has proposed rules for stablecoins under the GENIUS Act—a concrete step toward a regulatory perimeter for dollar-pegged tokens. OCC Chief Jonathan Gould, for his part, said the office is returning to 'risk-based supervision' that leans on examiner judgment rather than blanket prohibitions. Gould added that the OCC is actively investigating complaints of debanking tied to digital asset customers, consistent with a presidential executive order.
Who signed on
Besides Lummis, the letter carries signatures from Senators Dan Sullivan, Bill Hagerty, Bernie Moreno, Ted Budd, and Jon Husted. The group represents a core of crypto-friendly Republicans in the upper chamber, and their timing—early June 2026—suggests they want to keep pressure on regulators before the summer recess.
What happens now
The Fed, FDIC, and OCC haven't publicly responded to the letter yet. But with both Hill and Gould now on the record about reforms, and with a presidential executive order on debanking hanging over the process, the agencies have a narrowing window to produce a framework that satisfies both the Senate and the industry. The 1,250% rule isn't dead—but it's got six senators gunning for it.
