New Era for Bitcoin: SEC Makes Crypto Custody Easier for Banks
- SAB 122 simplifies cryptocurrency custody
- Banks gain flexibility with new rules
- SEC adopts pro-crypto stance, encouraging the sector
The U.S. Securities and Exchange Commission (SEC) has implemented a new policy, referred to as SAB 122, that makes it easier for banks to hold Bitcoin and other cryptocurrencies. This update replaces the previous SAB 121 rule, removing several regulatory barriers and reducing compliance burdens for financial institutions.
With the introduction of Staff Accounting Bulletin (SAB) No. 122, the SEC is paving the way for traditional banks to now offer crypto-related services more easily. Previously, the rules required custodied digital assets to be listed simultaneously as assets and liabilities on banks’ balance sheets. The new policy allows these risks to be considered contingent liabilities, which significantly reduces capital requirements for banks.
SEC Commissioner Hester Peirce celebrated the change on social media, stating: “Bye, bye SAB 121! Not fun | Staff Accounting Bulletin No. 122.” In turn, ETF analyst James Seyffart praised the new policy, considering it a correct and beneficial step for the cryptocurrency sector.
Thank you @HesterPeirce and Commissioner (Chairman?) Uyeda! This was the correct decision IMO pic.twitter.com/YjywF6Ybds
—James Seyffart (@JSeyff) January 23, 2025
This regulatory development reflects the recent pro-crypto shift by regulators in the United States, which are now making it easier for banks to securely hold cryptocurrencies for their customers. This represents a significant shift after years of a more cautious and restrictive approach.
There have been significant moves in favor of cryptocurrencies in the U.S. in recent months. In May 2024, a resolution to repeal SAB 121 was passed by Congress, though it was later vetoed by President Joe Biden. However, the creation of a crypto task force led by Hester Peirce and actions such as the executive order signed by President Trump to establish a national stockpile of digital assets are indicative of a positive shift in regulatory policies.
With SAB 122, banking institutions now have more freedom to offer cryptocurrency custody services, which is an important milestone for the adoption of these technologies in the United States.
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.
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