The Fed, OCC, FDIC Clarify Capital Treatment of Tokenized Securities

The federal banking agencies of the United States have issued clarifications on the capital treatment of tokenization securities. The guidance states that eligible tokenized securities should receive the same capital treatment as traditional securities under existing capital rules.

On Thursday, March 5, the U.S. Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System, and the Federal Deposit Insurance Corporation (FDIC) published joint guidance on securities tokenization.

The guidance is in the form of answers to frequently asked questions about the tokenization of real-world assets (RWAs) that are classified as securities in The U.S. — such as stocks, U.S. treasuries, or exchange-traded funds (ETFs).

The OCC’s guidance aims to provide clarity treatment for banks engaging in tokenization services, potentially encouraging wider adoption of tokenized assets.

“The capital rule is technology neutral. An eligible tokenized security should generally receive the same capital treatment as the non-tokenized form of security under the capital rule,” the OCC summarized in an X post yesterday evening.

One of the FAQs focused on whether the tokenized assets in question were issued on a public, permissionless blockchain network, or on a private, permissioned one. The banking agencies clarified that the distinction didn’t affect capital treatment, stating in its guidance:

“No, the capital rule does not provide a different treatment based on the use of
permissioned or permissionless blockchains.”

The integration of tokenized assets into existing financial frameworks represents a broader trend of financial innovation where blockchain and digital assets are increasingly seen as integral to the future of traditional finance. This regulatory clarity could serve as a catalyst for financial institutions to explore and expand tokenization services, thereby fostering innovation in capital markets.

The OCC, which regulates and supervises national banks and federal savings associations, has received a flood of applications in the past year from crypto-linked firms looking to obtain banking licenses, with zerohash and Revolut among the most recent examples.

As The Defiant reported earlier this week, a new report from three major, global financial infrastructure providers argued that interoperability is essential for digital asset securities to reach their full potential.

This article was generated with the assistance of AI workflows.