- The SEC has lifted a rule that restricted American banks from offering Bitcoin custody services, removing significant financial burdens
- This change allows banks to offer safe guardianship of BTC, making it easier for investors and companies to buy and hold the cryptocurrency
- Bitcoin reacted favorably to the news, hitting $106,679 at its daily peak and continuing its bullish trend
The SEC has just lifted a financial rule that restricted American banks from offering Bitcoin custody services. On January 24th, the Commission under the newly appointed Acting Chair Mark Uyead pulled the “Staff Accounting Bulletin No. 121” from its regulatory framework.
This development is more significant than it seems, as now banks will be allowed to Bitcoin custody services without the heavy financial burdens that were previously in place. This means financial institutions can now offer safe guardianship of BTC for their customers, making it easier and safer for investors and companies to buy and hold the cryptocurrency
The rule was introduced almost 3 years ago by the then SEC Chair Gary Gensler. During that time, institutions wanting to offer Bitcoin custody services had to declare their digital asset holdings as “liabilities”. This move created additional financial and regulatory challenges for banks as liabilities appear in these firms’ balance sheets as owed debt, affecting the banks’ access to credit.
Bitcoin Hits $106k Throughout The Day
There is reason to celebrate the news as Bitcoin custody by banks paves to way to more adoptions and an easier and safer route for Americans to start their BTC savings.
As for Bitcoin itself, the currency reacted favorably to the news by hitting $106,679 at its daily peak. Currently, Bitcoin trades at $104,611 — up 0.88% over the day. Despite the apparent sluggish movement, Bitcoin continues to hold on to its bullish trend started on January 9th. Since then, the asset gained 15.76% in value.
Since taking office on January 20th, Donald Trump appears slowly but surely putting in the work to strengthen Bitcoin and other crypto assets. Just today, the President announced a handful of other pro-Bitcoin moves that hold significant developments for digital assets.
Moves like the SAB 121 lift reinforce the expectations that the post-Gensler SEC will welcome innovation and support cryptocurrency adoption in the United States. Given the rapid pace of how developments are unfolding under the new presidency, expectations regarding the implementation of the American Bitcoin Strategic Reserve are definitely gaining traction.
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