BNY Mellon Granted Exemption from SEC Rule
According to sources, Bank of New York Mellon, the largest US custodian bank, has been exempted from a controversial rule by the SEC referred to as SAB 121. Up until now, this rule had made it compulsory for all entities holding customer cryptocurrencies to report them as corporate liabilities and disclose extensive information about the type and valuation of the protected assets.
Implications for Institutional Bitcoin Custody
The exemption could be a turning point for institutional Bitcoin custody in the United States. Allowing BNY Mellon to bypass some of the onerous conditions of SAB 121 may signal that the SEC will now let other systemically important banks enter the market, offering Bitcoin custody to their clients. Particularly important, this perhaps shows a relaxation in the federal squeeze on crypto-what many in the industry have called “Operation Choke Point 2.0.”.
Crypto Market Impact
Market analysts say the move can have a run-on effect on accelerating Bitcoin’s spot price. Michael Saylor, founder of MicroStrategy, the world’s largest corporate holder of Bitcoin, has stated bank custody is among the things that would bring the BTC price to new highs. According to Saylor, mainstream bank adoption of Bitcoin custody can drive the price of the cryptocurrency above $5 million a coin.
A Shift in U.S. Crypto Regulation?
The dispensation to BNY Mellon may also foreshadow a change in how the United States regulates cryptocurrency. Where lawmakers in the U.S. House of Representatives had vouched to kill SAB 121, it was upheld by the White House under President Joe Biden. This recent win for BNY Mellon does seem to suggest the reconsideration of the U.S. regulatory body on their stance with regards to digital assets.
What’s Next for U.S. Banks
But under the leadership of BNY Mellon, similar permissions can be extended to other major financial institutions in the blink of a second, setting up full-scale institutional uptake of cryptocurrency. This could go the extra mile in bringing the crypto industry back to life within the United States, where regulatory uncertainty has many at a standstill.
Due to the fast-evolving landscape of digital assets, this may just be the harbinger of SAB 121 exemption by BNY Mellon into a whole new era of integration of cryptocurrency within the U.S. banking system.
