Bitget App
Trade smarter
Buy cryptoMarketsTradeFuturesEarnWeb3SquareMore
Trade
Spot
Buy and sell crypto with ease
Margin
Amplify your capital and maximize fund efficiency
Onchain
Going Onchain, without going Onchain!
Convert
Zero fees, no slippage
Explore
Launchhub
Gain the edge early and start winning
Copy
Copy elite trader with one click
Bots
Simple, fast, and reliable AI trading bot
Trade
USDT-M Futures
Futures settled in USDT
USDC-M Futures
Futures settled in USDC
Coin-M Futures
Futures settled in cryptocurrencies
Explore
Futures guide
A beginner-to-advanced journey in futures trading
Futures promotions
Generous rewards await
Overview
A variety of products to grow your assets
Simple Earn
Deposit and withdraw anytime to earn flexible returns with zero risk
On-chain Earn
Earn profits daily without risking principal
Structured Earn
Robust financial innovation to navigate market swings
VIP and Wealth Management
Premium services for smart wealth management
Loans
Flexible borrowing with high fund security
Big Banks Show FOMO and Seek a Slice of the Bitcoin ETF Action

Big Banks Show FOMO and Seek a Slice of the Bitcoin ETF Action

CryptopotatoCryptopotato2024/02/16 18:22
By:Wayne JonesMore posts by this author

They argued that U.S. banks were not serving as asset custodians for Bitcoin ETFs, despite fulfilling that role for other ETPs.

The interest in spot Bitcoin ETFs among financial institutions such as banks and brokerages is surging as they push for the Securities and Exchange Commission (SEC) to change the definition of crypto assets.

Under the new definition, they would have a bigger role in crypto, such as being Bitcoin ETF custodians.

Banks Petition SEC for Crypto Revisions

On February 14, a coalition of trade groups, including the Bank Policy Institute, American Bankers Association, Financial Services Forum, and Securities Industry and Financial markets Association, sent a letter to SEC Chair Gary Gensler with a request. It highlighted the recently approved spot Bitcoin ETFs and noted the absence of American banks as custodians for these products.

The coalition requested that the SEC revisit and consider modifying the Staff Accounting Bulletin 121 (SAB 121), issued in March 2022, providing guidance on accounting for crypto asset custody obligations. They pointed out that it has been two years since the guidance issuance, and significant developments have occurred during this period, including the approval of spot Bitcoin ETFs.

The current guidance outlined in SAB 121 mandates that banks hold digital assets on their balance sheet, which is deemed costly and restricts their capacity to offer crypto custody services at a larger scale. The group wants the SEC to narrow the definition of cryptocurrencies to exclude traditional assets recorded on the blockchain, ensuring that assets such as tokenized deposits are not subject to strict crypto guidance.

Furthermore, they have requested that banks be exempted from the on-balance sheet requirements stipulated in SAB 121. However, they advocate for maintaining the disclosure requirements, enabling banks to participate in certain crypto activities while ensuring investors’ transparency.

FOMO Grapples Banks with Crypto ETFs’ Exclusion

In a post on X, Bitwise chief investment officer Matt Hougan remarked that the letter indicates Bitcoin ETFs have shifted the “tone around crypto regulation in Washington” as banks are eager to participate in the “digital financial wave.”

A weekly Bitcoin newsletter author, The Bitcoin Therapist, pointed out that the Q1 FOMO is already driving banks mad since they cannot hold BTC ETFs for their customers.

Meanwhile, as Bitcoin exchange-traded funds (ETFs) continue to gain momentum, the investment class is becoming increasingly appealing compared to traditional assets like gold. Recent reports indicate a significant shift in investor sentiment, with over $3 billion worth of gold exchange-traded funds (ETFs) being divested since the beginning of the year.

On the other hand, Bitcoin ETFs have been surging and have managed to amass over $4 billion in inflows, even though they are only 1/13th the size of the gold ETF market.

You Might Also Like:

  • Streak Over: These Bitcoin Spot ETFs See First Day With Zero Inflows
  • Spot Bitcoin ETF Enthusiasm Spurs Increased Capital Inflow into Crypto Markets
  • Bitcoin Blasts Over $49,000 As ETFs Gather $1.7 Billion In Volume After Launch
0

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

PoolX: Earn new token airdrops
Lock your assets and earn 10%+ APR
Lock now!