Bank of New York Mellon, the largest custodian bank in the United States, has been granted an exemption from a controversial rule by the Securities and Exchange Commission that could allow it to hold bitcoin.
Institutional custody of Bitcoin (BTC) and cryptocurrencies in the United States has taken a step forward as Bank of New York Mellon has reportedly been granted permission to operate outside of Staff Accounting Bulletin 121, also known as SAB 121.
The U.S. Securities and Exchange Commission has advised entities that hold cryptocurrencies for clients to report these holdings as liabilities of the company. The SEC has also required financial service providers to disclose the type of cryptocurrency held and the associated valuation.
Lawmakers in the U.S. House of Representatives initially repealed the SEC policy, but the White House, led by current President Joe Biden, vetoed the bill into law.
Bank of New York Mellon’s exemption from SAB 121 requirements could pave the way for major U.S. banks to take custody of customers’ bitcoin and cryptocurrencies. Michael Saylor, founder of MicroStrategy, the world’s largest bitcoin holder, said one or more major banks could soon take custody of bitcoin and cryptocurrencies. Receive Green light to save cryptocurrencies.
Such a development could signal an easing of the U.S. federal crackdown on cryptocurrencies. For years, industry advocates have criticized U.S. authorities for what they call “Operation Choke Point 2.0,” a multi-regulatory agenda to ban cryptocurrencies from the traditional financial system.
The ability of BNY Mellon and other banks to hold bitcoin could also accelerate the spot price of bitcoin. Saylor previously suggested that banks’ holding bitcoin was the last of three catalysts needed to push the price of bitcoin above $5 million per coin.
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