Bitcoin · Republicans · US Congress · CryptoSlate
A little-known 1,250% rule could lock US banks out of Bitcoin
Compiled by KHAO Editorial — aggregated from 1 source + 2 references discovered via search. See llms.txt for citation guidance.
◌ Single Source
A group of Republican senators is warning US bank regulators that a little-known capital rule could effectively keep banks out of Bitcoin, even as Congress moves to give traditional financial firms a larger role in digital asset markets.
Key facts
- A 1,250% risk weight multiplied by the 8% minimum capital requirement equals a 100% capital allocation, meaning a bank holding $100 million in Bitcoin needs at least $100 million in capital against it
- US-traded spot Bitcoin ETFs already saw roughly $4.4 billion in outflows through May 15 to June 3, showing that institutional access to Bitcoin has routed around bank balance sheets
- The Senate Banking Committee advanced the CLARITY Act on May 14 by a 15-9 vote, sending it to the Senate floor
- Bitcoin is -2.08% over the past 24 hours and currently sits at rank # 1 by market cap
Summary
01 Six Republican senators urged US regulators to rewrite capital rules they say make bank-held Bitcoin uneconomic. 02 They argue Basel's 1,250% risk weight can require $100 million to back $100 million of Bitcoin exposure. 03 The agencies have eased crypto access, but the Bitcoin capital question remains unresolved as Basel reviews its standard. In a May 27 letter to Federal Reserve Vice Chair for Supervision Michelle Bowman, FDIC Chair Travis Hill, and Comptroller of the Currency Jonathan Gould, six senators urged the agencies to build a new capital framework for on-balance-sheet digital asset activities.