Senators Push Bank Capital Rules for Crypto, SpaceX Locked Out of S&P 500, Big Banks Plan Tokenized Deposit Network

Crypto News

A group of US Senate Republicans is pressing federal regulators to overhaul how banks treat digital assets on their balance sheets. Senator Cynthia Lummis led colleagues including Dan Sullivan, Bill Hagerty, Bernie Moreno, Ted Budd and Jon Husted in sending a May 27 letter to the Federal Reserve, FDIC and Office of the Comptroller of the Currency. The lawmakers called the Basel Committee's 1,250% risk weight on crypto holdings a de facto ban, arguing it is not calibrated to the real risk profile of digital assets. They want a technology-neutral framework that builds on March guidance covering tokenized securities and lets banks meaningfully participate in Bitcoin and broader digital asset markets.

The pressure on regulators arrives as the Senate prepares to advance the CLARITY Act, which would map out how federal agencies oversee crypto activity. The current draft permits banks to use digital assets and blockchain infrastructure for payments, lending, custody and trading. Senate leaders want a vote before the November midterms, since a failure to pass would force the bill to be reintroduced next session. Lummis and her co-signers argued that any forthcoming crypto law will require fresh capital guidance, and urged regulators to begin drafting that framework now rather than waiting for legislation to clear both chambers and reach the president's desk.

Elon Musk's SpaceX is set to debut publicly at roughly $1.75 trillion next week, yet the world's most-watched equity benchmark will not be making room for it. S&P Dow Jones Indices confirmed it is leaving its eligibility rules untouched, citing the company's $4.94 billion 2025 net loss and the requirement for profitability over the trailing four quarters plus the most recent one. The index committee was explicit that waivers should not be granted solely on the basis of market capitalization, denying passive S&P 500 funds the automatic buy-in that inclusion would have triggered across trillions of dollars in tracked assets.

For crypto markets, the exclusion still matters because SpaceX disclosed 18,712 BTC on its S-1 at a cost basis of $661 million, making the rocket maker one of the largest corporate cold wallet holders to ever list shares. Nasdaq moved in the opposite direction, fast-tracking rules to admit SpaceX into the Nasdaq 100 shortly after listing, which will force tracking funds to absorb a meaningful slice of float. FTSE Russell has already cleared SpaceX for its global equity indices, and S&P will tweak entry criteria for its broader Total Market and Dow Jones US Total Stock Market gauges, giving the stock partial passive exposure.

Wall Street's largest lenders are preparing a coordinated push deeper into on-chain finance with a tokenized deposit network targeted for the first half of 2027. The system would be operated by The Clearing House, a private-sector payments utility owned by a consortium that includes JPMorgan Chase, Bank of America, Citigroup and Wells Fargo. Internally referred to as the bridge or the chain, the platform is designed to move tokenized deposits instantly and support around-the-clock settlement. Clearing House CEO David Watson described the initiative as a big move for the banks and said the industry now faces a radically different future built around on-chain payments and finance.

Initial adoption is expected to center on large multinational corporations looking to streamline treasury operations, run 24/7 liquidity, and execute cross-border transfers without the friction of legacy correspondent rails. The effort builds on JPMorgan's November 2025 launch of JPM Coin for institutional clients on the Base Layer 2 network, BNY's January rollout of a tokenized deposit service, and a joint interoperability framework between Singapore's DBS and Kinexys by J.P. Morgan that aims to bridge tokenized deposits across separate on-chain ecosystems. The Clearing House initiative would unify those parallel pilots into a single shared infrastructure backed by federally regulated US banks.

The connective thread across these stories is the steady institutionalization of digital assets within the rule-bound machinery of US finance. Lawmakers are trying to dismantle capital penalties that keep banks at arm's length, regulators are recalibrating which corporate balance sheets passive money is forced to own, and the largest commercial banks are constructing a tokenized settlement layer that absorbs DeFi functionality into supervised plumbing. Rather than a speculative cycle driven by retail flows or a single altcoin narrative, the dominant arc is policy and infrastructure convergence — and the rails being laid this year will define how the next bull market distributes capital.