US Office of the Comptroller of the Currency: "Tokenized securities are no different from traditional securities...to be treated the same for capital"

US banking regulators have issued an official position that tokenized securities (ST) will be subject to the same capital rules as existing traditional securities. The move is expected to further accelerate the institutional adoption of tokenized securities that leverage blockchain technology.

On the 5th (local time), the Office of the Comptroller of the Currency (OCC) released a response document titled “Frequently Asked Questions (FAQ) on the Capital Treatment of Tokenized Securities.”

The regulator defined “tokenized securities” as securities that use distributed ledger technology (DLT) to evidence ownership. The core of the FAQ response is a clear statement that, even if a security is tokenized, it must receive the same capital treatment under capital regulations as a typical non-tokenized security.

In particular, US regulators underscored the principle that capital regulation is technology-neutral. The OCC said, “The technology used to issue and trade the securities generally has no effect on the capital regulatory treatment of those securities.” This is interpreted to mean that financial institutions will not face additional regulatory or capital burdens solely because they use new technologies such as blockchain.

However, the regulator also pointed to the importance of risk management when introducing new assets. The OCC said, “Banks holding tokenized securities should apply sound risk management practices” and “must strictly comply with all applicable laws and regulations.”