SEC Clears Path for Banks to Hold Bitcoin, Repeals SAB 121
The U.S. Securities and Exchange Commission (SEC) has scrapped its controversial SAB 121 policy, making it easier for banks to custody Bitcoin and other digital assets. Under the new guidance, Staff Accounting Bulletin (SAB) No. 122, financial institutions are no longer required to record customer-held crypto assets as liabilities on their balance sheets—a major shift that reduces regulatory burdens and encourages broader adoption.
Banks Can Now Safely Offer Crypto Custody
Previously, SAB 121 forced banks and crypto custodians to recognize both an asset and a liability for customer-held crypto, making compliance costly and impractical. Now, under SAB 122, banks can account for only potential risks—such as losses from theft or fraud—as contingent liabilities rather than treating all customer crypto as a direct financial obligation.
SEC Commissioner Hester Peirce celebrated the change, posting on X (formerly Twitter), “Bye, bye SAB 121! It’s not been fun.” ETF analyst James Seyffart echoed the sentiment, thanking Peirce and SEC Chairman Mark Uyeda for making the right call.
US Crypto Regulations Are Taking a Pro-Growth Turn
The repeal of SAB 121 follows a series of pro-crypto moves in Washington. Just a day earlier, the SEC established a dedicated crypto task force led by Peirce, and President Trump signed an executive order proposing the U.S. establish a strategic digital asset reserve.
For years, U.S. banks have been eager to custody Bitcoin but were held back by regulatory red tape. With these new changes, financial institutions now have a clear path to offering crypto services, setting the stage for a new wave of institutional adoption.
The U.S. crypto industry, long hindered by regulatory uncertainty, may finally be entering a new era of growth and legitimacy.
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