In a major move for the crypto market, the SEC has officially rescinded SAB 121, a ruling that previously prevented banks from holding crypto assets due to its accounting requirements. This move is being hailed as incredibly bullish, as it opens the door for banks to offer crypto custody, buy and sell digital assets, and provide related services to clients.
SAB 121 had required banks to treat crypto as a liability on their balance sheets, making it difficult for them to engage with crypto assets. With the rescindment, banks are now free to offer a range of crypto services, including custody and trading, without the same restrictions.
This decision comes after growing pressure from major financial institutions, with CEOs from Bank of America, State Street, and other banks calling for clearer regulations to allow them to enter the crypto space. Many view this as a step towards making the U.S. a global leader in digital assets.
Senator Cynthia Lummis, a strong advocate for crypto innovation, celebrated the repeal of SAB 121, calling it a victory for American innovation and the digital asset industry. With new leadership like Lummis heading the Senate’s Digital Asset Subcommittee, there is hope that further pro-crypto legislation will follow. SEC Commissioner Hester Peirce wrote on social media, “Bye, bye SAB 121! It’s not been fun.”
Experts are predicting that this move could be the start of a broader wave of crypto adoption in traditional finance. Banks are expected to ramp up their efforts to offer crypto-related services, which could include investment products and payments solutions for both institutional and retail clients.
