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

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

The U.S. federal banking agencies have issued new guidance clarifying that tokenized securities should receive the same capital treatment as traditional 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).

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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.

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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.

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Crypto World

US National Cyber Strategy Pledges Support For Crypto And Blockchain

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Cryptocurrencies, United States, AI, Donald Trump, Quantum Computing

Crypto industry executives are combing through US President Donald Trump’s National Cyber Strategy after it was released on Friday, searching for hints about what it could signal for government support of the crypto industry.

“Crypto and blockchain are explicitly named as technologies to be ‘protected and secured.’ This is a first for any US cybersecurity strategy,” Galaxy Digital’s head of firmwide research Alex Thorn said in an X post on Friday.

Crypto and blockchain were mentioned once in the six-page report:

“We will build secure technologies and supply chains that protect user privacy from design to deployment, including supporting the security of cryptocurrencies and blockchain technologies.”

However, industry executives have also been interpreting other parts of the document to see how they relate to crypto.

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Cryptocurrencies, United States, AI, Donald Trump, Quantum Computing
Source: Mark Chadwick

Thorn pointed to a section pledging to “uproot criminal infrastructure and deny financial exit and safe haven.” “This language could easily justify crackdowns on mixers, privacy coins, and unregulated off-ramps,” he said.

Bitcoin VC points out that quantum has been taken “seriously”

Castle Island Ventures founder Nic Carter, who has been vocal about the threat of quantum computing to Bitcoin (BTC) in recent times, pointed to the section saying the government “will accelerate the modernization, defensibility, and resilience of federal information systems by implementing cybersecurity best practices, post-quantum cryptography, zero-trust architecture, and cloud transition.”

“Sure seems like they’re taking quantum seriously. Nothing to worry about, I’m sure,” Carter said in an X post.

It comes as the crypto industry continues to debate about how close quantum computing is to being a serious threat to Bitcoin. On Feb. 15, Carter said that major Bitcoin-holding institutions may eventually lose patience with Bitcoin developers for not addressing quantum computing concerns quickly enough.

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Trump points to the next generation as a priority

Trump said that the National Cyber Security outlines his priorities for “ensuring that America remains unrivaled in cyberspace.” Artificial intelligence was a key focus of the report.

“We will secure the AI technology stack—including our data centers—and promote innovation in AI security,” it said.

Related: Community banks and crypto industry ‘are allies’ in CLARITY Act debate: Exec

Trump also emphasized the importance of recruiting the next generation of workers in the cyber workforce to “design and deploy exquisite cyber technologies and solutions.”

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The US typically releases a national cybersecurity strategy every administration, outlining the government’s priorities for emerging technologies.

Magazine: The debate over Bitcoin’s four-year cycle is over: Benjamin Cowen