1250% risk weight is indeed outrageous; tokenized assets and underlying assets should be treated equally, supporting the implementation of the technology neutrality principle.

A group of U.S. senators supporting cryptocurrencies is pressuring banking regulators to establish digital asset capital requirements and criticizing Basel's 1250% risk weight ban on digital assets.
They advocate for a more balanced approach within the U.S. framework and argue that tokenized securities should receive the same capital treatment as underlying assets, calling for the expansion of technology-neutral principles to digital assets.
The background is that Congress is reviewing the "Clear Act" and global regulators are reassessing Basel's crypto capital standards.