US Regulators Clear Path for Banks to Hold Tokenized Securities

US federal banking regulators have issued joint guidance clarifying that tokenized securities will receive the same capital treatment as their traditional counterparts. This removes a key barrier to institutional adoption of blockchain-based assets.

The Office of the Comptroller of the Currency (OCC), the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) published a FAQ document on March 5 stating that the capital rule is “technology neutral” — meaning the method used to issue or transact a security, including distributed ledger technology (DLT), does not affect how banks must account for it.

What the Guidance Says

Under the joint FAQ, banks should treat an “eligible tokenized security” exactly like its traditional equivalent on their balance sheets. The term refers to a token that confers legal rights identical to the non-tokenized form. The same principle applies to derivatives referencing tokenized securities.

The agencies also clarified that tokenized securities can be recognized as credit risk mitigants. This applies when they meet the definition of “financial collateral” under the capital rule. They would be subject to the same haircuts as non-tokenized versions.

Notably, the guidance explicitly states that capital treatment will not differ based on blockchain type. It makes no distinction between permissioned and permissionless blockchains. This directly reverses the risk hierarchy that defined the Biden-era regulatory posture.

Why It Matters

Under the previous administration, permissionless blockchains such as Ethereum were frequently treated as carrying greater regulatory risk than enterprise-grade, permissioned alternatives. That distinction affected how banks approached blockchain-based asset holdings.

The new FAQ eliminates that bifurcation, putting public chains on equal legal footing with private ones for capital purposes. Eleanor Terrett of Fox Business noted the shift, pointing out that the change represents a meaningful departure from how the prior administration framed blockchain risk.

For banks, the practical implication is significant. A tokenized US Treasury bond or equity share held on a public blockchain can now be included on the balance sheet as normal. It receives the same regulatory treatment as a bond held through a traditional central securities depository. The condition is that the token must confer identical legal ownership rights.

Market Context

Data from RWA.xyz shows the total market capitalization of tokenized stocks has crossed $1 billion. Ethereum and Solana account for the majority of activity. The broader tokenized RWA market has been one of the fastest-growing segments in crypto. Asset managers such as BlackRock and Franklin Templeton already offer tokenized fund products.

The regulatory clarity could accelerate bank participation in this space. This is particularly true for institutions hesitant to engage with public blockchain infrastructure. Unresolved capital rule questions had been a key obstacle.

The agencies noted that banks holding tokenized securities remain subject to sound risk management requirements. This is consistent with any other exposure type.