The US Securities and Exchange Commission (SEC) has officially revoked the cryptocurrency accounting policy known as SAB 121
Reducing Barriers for Banks and Financial Institutions:
SAB 121 required financial institutions to record their customers’ crypto assets as liabilities on their balance sheets, which created a major barrier for banks to engage in the storage and management of cryptocurrencies. The revocation of this policy could encourage more financial institutions to enter the crypto market, thereby increasing liquidity and wider acceptance of cryptocurrencies in the traditional financial system.
Increasing Transparency and Trust:
This change could lead to improved regulations and accounting standards for cryptocurrencies, increasing the transparency and trustworthiness of crypto-related financial statements. This could reduce concerns about the risks of managing digital assets.
Promoting Investment and Product Development:
With the loosening of regulations, businesses and investors may feel more comfortable investing in cryptocurrencies and developing crypto-related financial products, such as ETFs, derivatives, and custody services.
