On Thursday evening, the SEC withdrew a guideline known as SAB 121, which had increased the cost of holding digital Assets. Analysts believe that this move effectively opens the door for American Financial Institutions to hold Cryptos, allowing traditional Banks to provide crypto custody services without facing de facto penalties.
The new SEC in the USA has taken significant action.
On January 25, according to media reports, the SEC rescinded a guideline known as SAB 121 on Thursday evening. This guideline previously called for Financial Institutions to treat the crypto assets held for clients as liabilities on their balance sheets, significantly increasing the cost of holding digital assets.
As one of the first measures supporting cryptos during Trump's second term, analysts believe this move by the SEC effectively opens the door for American Financial Institutions to hold cryptocurrencies and supports the market's general expectation that the Trump administration will adopt a more welcoming attitude toward digital assets.
In addition, according to Global Times, Trump also signed an executive order related to cryptos on the same day, aimed at protecting the rights of individuals and businesses to legitimately use open blockchain networks, including developing software, Trade, and independently holding digital assets. Moreover, he has requested cabinet-level officials to submit a proposal report on regulatory and legislative proposals a few months later.
Although SEC Chairman Paul Atkins, nominated by Trump, is still awaiting Senate confirmation, Acting Chairman Mark Uyeda and another Republican commissioner, Hester Peirce, have extended a 'friendly hand' to cryptocurrencies. They established a working group and abolished this guideline.
Mark Palmer, an Analyst at Benchmark, stated:
SAB 121 created a punitive framework that effectively prevents Bank of America from providing.$Bitcoin (BTC.CC)$And Other custodial services for Cryptos. Now traditional Banks will be able to provide crypto custody services without facing de facto penalties.
Even before the SEC took action, large Banks in the USA were eagerly anticipating the ability to attract crypto clients, as Trump and his allies in the executive and legislative branches were paving the way for digital Assets.$Charles Schwab (SCHW.US)$Company CEO Rick Wurster stated in an Analyst conference call this week, "We do hope to be able to offer spot crypto services, and we expect that at some point, regulation of Cryptos will allow us to do so."
Brian Daly of Akin Gump law firm pointed out that custody services are a "prerequisite" for financial institutions to offer crypto services to clients. He said that old rules basically prevented all responsible banks, brokers, and the financial intermediaries we rely on from becoming crypto custodians.
Editor/ping