SAB 122 Catalyzes Bitcoin Prices More Than The US BTC Reserve
The US Securities and Exchange Commission (SEC) revoked Staff Accounting Bulletin (SAB) No. 121 on Thursday, January 23, imposing strict crypto custodial accounting standards on US banks and financial organizations. Several industry analysts expect the recently published SAB 122 to have a greater impact on Bitcoin's market dynamics than the planned US Bitcoin Reserve (SBR).
Impact on Bitcoin
SAB 121, passed in 2022, required banks to list customer-held cryptocurrency as liabilities. This categorization raised financial institutions' operating costs and complexity, discouraging them from delivering crypto-related services. Thus, the limitation hindered Bitcoin and other cryptocurrency integration into conventional banks.
The repeal of SAB 121–122 eliminates this accounting barrier. On social media, SEC Commissioner Hester Peirce said, “Bye, bye SAB 121! Not fun: SEC Staff Accounting Bulletin 122.”
The Bitcoin community welcomed the SEC's decision. According to x3 creator Andrew Parish, rescinding SAB 121 is a stronger driver for Bitcoin than the SBR. Mark this post.” Troop founder Fred Krueger said, “SAB 122 is extremely good for Bitcoin. More crucial than the upcoming Bitcoin Reserve. Now watch the banks accumulate.”
In a tweet, MicroStrategy Executive Chairman Michael Saylor summarized market sentiment: “SAB 121 has been rescinded, allowing banks to custody Bitcoin. 🚀” As Saylor previously said, conventional bank custody was the remaining open key factor for Bitcoin reaching $1 million per coin.
The regulatory loosening should boost institutional BTC and crypto market involvement. Bank of America CEO Brian Moynihan, the second-largest US bank by assets, discussed crypto adoption with CNBC's Andrew Ross Sorkin at the World Economic Forum in Davos, Switzerland.
According to the SEC's recent guidance, banks are now more likely to create and market crypto services, including custody solutions, which were previously limited by SAB 121.
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