The Fed, FDIC, and OCC jointly confirmed that tokenized securities receive identical capital treatment to their traditional counterparts. The agencies emphasized that bank capital rules are “technology neutral,” putting a security on a blockchain does not change its risk-weight. The capital rules apply the same way whether the security is recorded on paper or on a blockchain. There are interesting benefits. For example, let’s say the bank participates in a mortgage loan originated by another lender. Today, that participation is tracked on paper, transferred by fax or email, and settled in days. Tokenize that same participation, and ownership transfers instantly on a shared ledger, with no reconciliation disputes and no settlement delays.
What you should do: This is an evolving field and a great time to learn more. If your institution has been curious about distributed ledger technology, the capital treatment for securities is no longer a prohibitive factor.