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After years of lobbying by the cryptocurrency industry, the U.S. Securities and Exchange Commission has repealed a law forcing banks to Bitcoin and other tokens as liabilities on its balance sheet.
The guidance represents a major deterrent to Wall Street banks that own Bitcoin and is the latest in a series of actions by the new Trump administration to make it easier for U.S. companies and financial firms to trade virtual, decentralized currencies.
The guidance, called Staff Accounting Bulletin 121, or SAB 121, was launched in 2022 and imposes strict capital requirements on digital assets. The measure significantly increases the financial and regulatory risks of providing cryptocurrency custody services, increases operating costs for financial institutions, and ultimately hinders Wall Street’s broader participation in the cryptocurrency market.
Last year, the effort to overturn SAB 121 gained bipartisan support in Congress. but then-President Biden vetoed the proposed legislation, keeping the rule in place and further preventing banks from adopting digital assets. Banks are largely prohibited from expanding their cryptocurrency offerings beyond derivatives trading and offering ETFs to wealth management clients.
U.S. Securities and Exchange Commission (SEC) Commissioner Hester Peirce Tuesday The announcement was applauded by the appointment to lead a new “Cryptocurrency Task Force” within the agency aimed at “developing a comprehensive and clear regulatory framework for crypto-assets.”
“Bye, bye SAB 121! It’s not fun,” she wrote in a letter. Post on X The decision came late Thursday night.
The U.S. Securities and Exchange Commission (SEC) announced its decision to revoke the rule in a statement noticeJust days ago, former SEC Chairman Gary Gensler, a vocal supporter of the measure, resigned from his position. Gensler argued that the rule is necessary to protect investors when cryptocurrency companies go bankrupt.
this week In Davos, Switzerland, Goldman Sachs CEO David Solomon told CNBC that from a regulatory perspective, the bank cannot own Bitcoin and it would revisit the issue if the rules change. CEO of Morgan Stanley and Bank of America also spoke at the World Economic Forum about how the president Donald TrumpA pro-cryptocurrency tone could reshape their plans and potentially lead to an expansion of digital products.
— CNBC’s Jeff Cox contributed to this report.
