The White House Watch newsletter is now available for free, offering insights into the implications of the upcoming 2024 US election for Washington and beyond. Recent developments indicate a shift in the cryptocurrency landscape, as Wall Street’s securities regulator has overturned a rule that made it costly for banks to hold digital assets. This pro-crypto move aligns with the expected more favorable approach of former President Donald Trump towards digital currencies. As major banks anticipate the ability to engage in crypto services, industry leaders are pushing for regulatory changes that could allow for the growth of crypto assets in traditional finance, marking a turning point for the sector.
Unlocking New Opportunities: Crypto-Friendly Shift from SEC
The Securities and Exchange Commission has recently taken a significant step to make it easier for banks to engage with cryptocurrencies. This new movement comes after the reversal of a Biden-era rule that made it costly for banks to hold digital assets.
Donald Trump’s administration is showing a more favorable attitude toward the crypto Market, with the SEC’s decision marking one of its early pro-crypto moves. The overturned guidance, known as SAB 121, previously required banks to treat digital tokens held for customers as liabilities, complicating their ability to offer services related to cryptocurrencies.
As interest in crypto continues to grow among influential financial groups, BlackRock CEO Larry Fink has urged the SEC to speed up approvals for creating tokens backed by traditional assets like stocks and bonds. This push indicates a shift towards greater legitimacy in the digital asset sector.
In tandem with the SEC’s changes, Trump has announced an executive order outlining priorities for cryptocurrency. He is asking cabinet members to provide recommendations on regulatory reforms within months. Even though Trump’s nominee for SEC chair, Paul Atkins, awaits Senate confirmation, the acting chair and other Republican commissioners are already steering the agency toward a more welcoming stance for cryptocurrencies.
Analysts have noted that this policy shift will significantly impact banks. Mark Palmer from The Benchmark Company emphasized that the previous regulation created a barrier to crypto custody services. Now that the rule has been abandoned, traditional banks can more easily offer custody services for cryptocurrencies, paving the way for wider adoption.
Major U.S. banks are eager to embrace crypto customers. For example, Charles Schwab’s CEO expressed optimism about future regulations allowing them to offer spot crypto services. The changing landscape reflects broader interest and investment in digital currencies.
With banks and financial institutions gearing up to dive into the cryptocurrency Market, it’s an exciting time for digital assets. Bitcoin saw a price increase recently, signaling growing confidence in the sector post-regulatory reform.
What does it mean for Wall Street banks to hold crypto?
It means that big banks on Wall Street can now legally own and manage cryptocurrencies. This could lead to more investment options for people.
Why is the US securities regulator allowing this?
The US securities regulator believes that allowing banks to hold crypto can bring more security and stability to the crypto Market. They want to make it safer for everyone involved.
How will this affect regular investors?
Regular investors could have more opportunities to invest in cryptocurrencies through their banks. It might also mean better protections and services in the crypto space.
Are there risks with banks holding crypto?
Yes, there are risks. The crypto Market is still very new and can be unpredictable. Banks need to be careful to manage these risks for their customers.
Can I buy crypto through my bank now?
It depends on the bank. Some banks may start offering crypto services soon, while others might take longer. It’s best to check with your bank to see what options are available.
