A group of Senate Republicans led by Sen. Cynthia Lummis is pressing key financial regulatory agencies to clarify capital standards for digital assets.
Regulators should work on a fresh capital framework for digital assets, they said in a letter sent last week to Federal Reserve Vice Chair of Supervision Michelle Bowman, Federal Deposit Insurance Corporation Chair Travis Hill, and Comptroller of the Currency Jonathan Gould. All three are testifying in front of the House Financial Services Committee on Thursday morning.
A statement on the letter was released on Thursday.
The lawmakers criticized standards from the international Basel Committee on Bank Supervision, published over the years, that assigned a "1,250% risk weight" on digital assets. Risk weight is used to figure out how much a bank has to hold against a certain asset, so riskier assets require more capital buffers.
Part of the Bank for International Settlements, the Basel Committee is a global standard-setting body composed of 45 central banks and banking supervisors, including U.S. regulators.
