News - US banks put pressure on SEC

By Luc Vesters

US banks put pressure on SEC

Day by day, more and more money is flowing into the Bitcoin ETFs from BlackRock, Fidelity & Co. that were admitted a month ago. But while the big asset managers' cash registers are ringing, many American banks on the sidelines for regulatory reasons. In an open letter, banking associations have called on the Securities and Exchange Commission (SEC) to revise the definition of crypto assets. By doing so, they want to secure a better role for the bull market. When the Bitcoin ETFs were approved, U.S. banks were excluded as managers for the time being.

U.S. banking associations' open letter to the SEC I Source: American Bankers Association

U.S. banking associations' open letter to the SEC I Source: American Bankers Association

The authors emphasized that, until now, U.S. banks have not been able to offer custody services for Bitcoin ETFs. Instead, Coinbase currently benefits from Bitcoin custody services for the nine ETF issuers. The letter therefore asks the SEC to review changes to Staff Accounting Bulletin 121 (SAB 121). Currently, these guidelines require banks to hold crypto assets directly on their balance sheets, resulting in high costs and limiting the scope of services.

What the U.S. banking lobby demands

The group is therefore calling on the SEC to exempt banks from the burdensome accounting requirements in the future. They also want a restriction on the definition of crypto assets in SAB 121 to exclude traditional assets on blockchain. This would make it easier for them to participate in the current trend of RWA tokenization. Despite the temporary absence of U.S. banks as custodians, the new Bitcoin ETFs have already seen total inflows of more than USD 4 billion, According to data from Farside.

Bloomberg ETF analyst Eric Balchunas concludes that U.S. banks are showing increasing interest in the crypto world that was once foreign to them. The latest call from the banking industry highlights the growing interest of traditional financial institutions in the crypto market. While stakeholders await new regulatory decisions, Bitcoin ETFs and the entire crypto space continue to develop positively. More and more institutional investors are flirting with entering the business against the backdrop of a bullish market environment.

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