The US Securities and Exchange Commission (SEC) has reversed an accounting rule that required banks to treat Bitcoin and other cryptocurrencies as liabilities on their customers’ balance sheets. This restriction has long served as a major deterrent to Wall Street banks holding cryptocurrency assets.
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The lifting of this restriction was the latest step in measures taken by the Donald Trump administration to make it easier for companies and financial institutions to work with virtual assets. We are talking about the Staff Accounting Bulletin 121 (SAB 121), which was introduced by the regulator in 2022. The document established strict requirements for banks working with cryptocurrencies, which significantly increased financial and regulatory risks when providing services for storing digital assets. This, in turn, increased the operating costs of financial institutions and discouraged banks from becoming more involved in the cryptocurrency market.
Sab 121 cancellations united representatives of both parties in the US Congress Last year. However, at that moment President Joseph Biden imposed a veto on the proposed bill, leaving the ballot in force. This decision has significantly cooled the interest of banks in the development of digital assets. Now, with the abolition of Sab 121, the Commissioner SEC Hester Pierce, recently appointed by the head of the “Special Cryptocurrencies Group” inside the department, praised this step. “Goodbye, Sab 121! It was very sad, ”she wrote in her account on the Network X.
The SEC SAB 121 cancel decision was announced a few days after Gary Gensler, the former SEC chairman and an active supporter of this restrictive measure, left his post. Hensler previously argued that this rule is necessary to protect investors in case of bankruptcy of cryptocurrency companies.