In a remarkable shift that has caught the attention of financial circles, the US Securities and Exchange Commission (SEC) announced the cancellation of a controversial accounting rule known as SAB 121, which was considered a major obstacle to banks seeking to provide digital currency services.
What's the story?
The move comes at a time when the US financial sector is preparing to expand its business in the field of digital assets, in light of changes in the regulatory landscape in the United States under the administration of Republican President Donald Trump.
In 2022, the SEC issued an accounting rule requiring banks that hold digital assets on behalf of their clients (a service known as “custody”) to record those assets as financial liabilities on their balance sheets.
This move has made dealing with digital currencies very expensive for banks, especially those that want to provide wide-ranging services to their customers in this field.
What is the importance of cancellation?
The accounting rule imposed significant financial and administrative restrictions on banks, limiting their ability to provide custody or other services related to digital currencies.
This has sparked strong opposition from the financial sector, with the rule seen as a hindrance to innovation and growth in the digital asset space.
What has changed?
• Last year, Congress successfully passed a resolution to repeal the rule with bipartisan support, but it was vetoed by Democratic President Joe Biden.
• With the change of administration in the White House, the rule was officially repealed through a new version known as “SAB 122.”
What do the experts say?
Hester Peirce, the SEC Commissioner known as the “mother of crypto,” commented on the X platform, saying: “Goodbye (SAB 121) it wasn’t fun.”
Peirce, a prominent advocate for cryptocurrencies, was recently appointed to chair a digital assets task force within the committee, in an effort to develop more sensible and balanced regulatory policies.
It is noteworthy that the announcement of this shift came just one day after Trump took office as President of the United States, and the resignation of the former Chairman of the Securities and Exchange Commission, Gary Gensler.
Meanwhile, Paul Atkins, a well-known figure in his support for the digital industry, has been nominated to chair the committee, pending Senate confirmation.
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