Republican Lawmakers, Led by Lummis, Urge End to Basel’s 1,250% Risk Weight for Digital Assets
04 Jun 2026 16:14 UTC - by JH Kim
Republican lawmakers led by US Senator Cynthia Lummis urged financial regulators to scrap the Basel framework’s 1,250% risk weight for digital assets.
➤ Market participants are closely watching if eased capital rules will encourage greater bank participation in the crypto market.
➤ The crypto industry argues this high risk weight excessively limits banks' ability to engage in digital asset custody and trading.
➤ Republican lawmakers, led by Senator Cynthia Lummis, are urging financial regulators to eliminate the Basel framework's 1,250% risk weight for digital assets.
JH Kim
Summary
• Republican lawmakers called for scrapping the Basel standard’s 1,250%% risk weight rule applied to digital assets.
• The crypto industry has criticized the 1,250%% risk weight for excessively limiting banks’ ability to hold digital assets and expand into custody and trading services.
• Markets are watching whether banks increase crypto business participation if US lawmakers and regulators ease capital rules tied to digital assets.
Forecast Trend Report by Period
Republican lawmakers led by US Senator Cynthia Lummis urged financial regulators to scrap the Basel framework’s 1,250% risk weight for digital assets.
The move comes as markets watch whether banks will expand their involvement in crypto-related businesses.
Binance News reported on June 4 that Lummis and other Republican lawmakers argued in a joint letter that current capital rules for digital assets are excessive.
The lawmakers said the 1,250% risk weight places undue limits on banks’ participation in the digital-asset market. They added that a new capital framework should be created to allow banks to take a more active role in the crypto market.
Under current Basel standards, some digital assets are assigned a 1,250% risk weight. That effectively requires banks holding those assets to set aside capital at a level roughly equal to the value of the assets.
The crypto industry has long criticized the rule, saying it places excessive constraints on banks seeking to hold digital assets or expand into custody and trading services.
Market participants expect bank involvement in crypto businesses to broaden if the US Congress and financial regulators ease capital rules related to digital assets.
Photo: Shutterstock
JH Kimreporter1@bloomingbit.ioHi, I'm a Bloomingbit reporter, bringing you the latest cryptocurrency news.
Categories rationale: The article directly addresses regulatory capital rules (legal-regulatory) concerning digital assets, specifically within the context of international banking standards (Basel) and their impact on US financial institutions (jurisdictions). It also touches upon the potential for increased bank involvement in crypto (institutional-adoption). Level 2 codes reflect the focus on how these assets are classified under securities law, the cross-jurisdictional nature of Basel, and the implications for banking pilots.Characteristics justification: The article discusses a pushback against existing regulations ('urged financial regulators to scrap', 'criticized the rule', 'excessively limiting'), indicating a negative sentiment towards the current framework. The focus on lawmakers' calls for change and the potential impact on future bank involvement suggests a degree of uncertainty regarding regulatory outcomes and market development. The topic of regulatory capital requirements for digital assets is a developing area, contributing to novelty and relevance.Tag relevance: The selected tags are highly relevant as they capture the core entities (Basel framework, digital assets, banks, lawmakers), the central issue (risk weight, capital rules), and the affected services (custody, trading) discussed in the article.asset-types: others
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sentiment: -0.4
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uncertainty: 0.7RWATimes slug: en.bloomingbit-republican-lawmakers-led-by-lummis-urge-end-to-basels-1-250-risk-weight-for-digital-assets-469987325