The Securities and Exchange Commission has set the stage for banks to hold cryptocurrency, after reversing a Biden-era policy that deterred them from doing so.
On Thursday, the SEC reversed SAB 121, which said that any bank that held digital assets on behalf of a customer must account for those assets as liabilities on its own balance sheet.
This accounting rule, issued in 2022, made holding cryptocurrency unattractive to banks, especially if banks wanted to hold large volumes of cryptocurrency in order to provide services to clients.
Wall Street opposed the rule at the time it was issued, and a bipartisan bill to strike it down passed both houses last year, only to be vetoed by President Biden.
The reversal was greeted with enthusiasm.
SEC Commissioner Hester Peirce Tweeted: “Bye, by SAB 121! It’s not been fun.”
Pierce has been tasked with leading a task force to create a “sensible regulatory path” for cryptocurrency.
Trump’s pick for SEC chair, Paul Atkins, enjoys significant support within the cryptocurrency community.
Donald Trump embraced cryptocurrency during his campaign, as he promised to make the US the “crypto capital of the planet” and build a national stockpile of Bitcoin.
The crypto industry spent nearly $120 million backing pro-crypto candidates in the election. That campaign was largely a success, and saw the unseating of avowed enemies of crypto like Senate Banking Chair Sherrod Brown in Ohio, and wins for pro-crypto candidates in Michigan, West Virginia, Indiana, Alabama and North Carolina.