The recent repeal of the SEC's SAB 121 has been positively received by the US crypto and banking industry, removing a major regulatory barrier for banks offering crypto custody services.
Criticism of SAB 121
Industry leaders see SAB 121 as an attempt by SEC Chairman Gary Gensler to keep traditional banks out of the crypto business as part of the Biden Administration’s broader regulatory crackdown on digital assets. However, opposition to the rule was not limited to crypto firms. Traditional accountants also objected, arguing that it creates a new accounting standard for digital assets that bypasses the usual rulemaking process.
Impact on the Future
While the rollback of SAB 121 marks a significant regulatory shift, banking executives remain cautious. Many are now turning to their primary regulators, the Federal Reserve and the Office of the Comptroller of the Currency (OCC), to determine whether US banks can enter the crypto custody and payments sector.
The repeal of SAB 121 is seen as a crucial step towards greater integration of traditional financial institutions and cryptocurrencies. However, many questions remain about the feasibility and principles of banking operations in this area.
