Banking agencies clarify capital treatment of tokenized securities

What changed

The federal banking agencies clarified that tokenization does not by itself change the regulatory-capital treatment of a security; banks must analyze the underlying exposure and applicable capital rules while managing tokenization-specific risks.

Who it affects

• Banks holding or servicing tokenized securities, investment advisers, funds, broker-dealers, and clients

What is still open

• Application to particular token structures, settlement arrangements, and operational-risk profiles

What it means for an advisor

• Do not assume tokenization changes an instrument’s prudential classification; document underlying exposure, custody, settlement, technology, and counterparty risks.