Circle Internet Financial has released a research paper proposing a risk-based capital framework, known as the Token Capital Adequacy Framework (TCAF), to address the challenges posed by stable value tokens in the burgeoning field of tokenized finance. As stablecoins and other similar tokens become more prevalent, existing capital adequacy standards, such as those from the Basel Committee on Banking Supervision, prove insufficient due to the unique financial and operational risks associated with blockchain-based assets. The study, conducted by Circle's Chief Economist Gordon Liao, Treasurer Dan Fishman, and CFO Jeremy Fox-Geen, argues that TCAF offers a more adaptive and risk-sensitive approach by focusing on quantitative assessments of market, credit, and operational risks specific to tokenized assets. Unlike traditional fixed-ratio methods, TCAF emphasizes stress testing and internal stakeholder input to manage non-financial risks, such as cybersecurity threats, thereby enhancing accountability and stability. The framework is not only applicable to stablecoin issuers but could also be used by banks to better address operational risks in the digital age, offering a more nuanced method for capital allocation that strengthens financial resilience.