SEC Eases Rules for Banks to Safely Hold Bitcoin

The SEC has introduced new guidance under Staff Accounting Bulletin No. 122, replacing the previous framework (SAB 121) that made it difficult for banks to offer cryptocurrency custody.
This update simplifies how financial institutions handle customer-held digital assets like Bitcoin.
Previously, institutions had to record both assets and liabilities for customer crypto holdings, which added regulatory and financial burdens.
The new guidelines allow banks to account for risks, such as theft or fraud, as contingent liabilities rather than rigid balance sheet entries. SEC Commissioner Hester Peirce praised the move, highlighting its importance for innovation.
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The change reflects a growing shift in U.S. crypto regulation. While earlier attempts to repeal SAB 121 faced political setbacks, this update signals a more supportive stance for digital assets.
Coupled with recent federal initiatives, including a proposed national crypto reserve, the regulatory landscape appears to be opening up for crypto growth. Banks now have greater flexibility to provide custody services, potentially accelerating institutional adoption of Bitcoin and other cryptocurrencies.