Fed Says Tokenized Securities Under Same Capital Rules

The Federal Reserve, FDIC, and OCC issued new guidance clarifying that tokenized securities are subject to the same capital treatment as their traditional counterparts, emphasizing that the rules are "technology neutral." The agencies stated that the technologies used to issue or transact a security generally do not affect its capital treatment; thus, an eligible tokenized security must be treated identically to its non-tokenized form under capital rules. This means financial institutions will not be required to over-collateralize tokenized securities on their balance sheets, which is typically required for unproven or volatile assets. Furthermore, derivatives referencing an eligible tokenized security will be treated the same as derivatives referencing the non-tokenized version for capital purposes. The regulators also confirmed that tokenized securities can qualify as legal financial collateral if they meet liquidity and ownership requirements, allowing them to serve as credit risk mitigants. This clarification was prompted by the increasing interest in asset tokenization from major traditional finance firms.

(Source：Cointelegraph)