The United States Securities and Exchange Commission (SEC) has cleared the path for major Wall Street banks to hold and manage cryptocurrencies. This regulatory breakthrough could mark a pivotal moment in the ongoing integration of crypto into mainstream financial services.
Trump Overturns Banking Policy on Crypto Holding
The latest moves emerged as U.S. President Donald Trump shifted away from the previous administration’s policies, marking a significant victory for the crypto industry.
In a statement on its website, the SEC announced that it had revoked the 2022 guidance, Staff Accounting Bulletin 121, which former President Joe Biden prevented lawmakers from overturning in May of the previous year.
The crypto industry and lawmakers supporting digital assets had consistently opposed the rule, which required companies holding digital assets for clients to treat them as liabilities, thereby increasing the cost of providing such services due to the previous administration’s stance on crypto.
Gensler Steps Down as SEC Chair
Former SEC Chair Gary Gensler, who resigned on Monday, had also argued that the measure was crucial for safeguarding investors in the event of bankruptcies, a situation he noted was common in the industry.
The crypto market is waiting for Mark Uyeda, the new SEC chair, who is expected to bring a more crypto-friendly approach to regulation. Surprisingly, President Trump had earlier announced that a different congress member would assume office. Nonetheless, Uyeda has been a vocal crypto industry advocate and even described Gensler’s strategy towards digital assets as “a disaster.”
Commenting on the latest announcement, co-head of regulatory affairs at the Bank Policy Institute, Paige Pidano Paridon, said:
“Today’s decision restores banks’ ability to serve as a trusted and secure option for clients that choose to custody digital assets.”
Before the announcement earlier this week, the SEC revealed the creation of a crypto task force, which Republican Commissioner Hester Peirce will lead.
What is Next For the Crypto Market?
The agency’s decision to revoke accounting guidance on crypto assets also represents a monumental shift in the evolution of the financial industry. With institutional involvement expected to increase, the digital asset market will likely see greater mainstream acceptance.
Meanwhile, the SEC’s recent action is just part of a broader effort to create balance in the crypto space. The U.S. government has been actively developing more detailed regulations for the cryptocurrency market, aiming to strike a balance between fostering innovation and ensuring investor protection.
