Financial groups urge SEC to revise cryptocurrency storage accounting regulations
Financial advocacy groups are urging the SEC to revise current accounting rules that increase the financial burden on U.S. banks that manage cryptocurrency assets for their customers.
The call for change is underscored by bipartisan efforts by members of Congress advocating for the repeal of these accounting standards. A consortium of industry groups, including the American Bankers Association and the Securities Industry and Financial Markets Association, formally submitted a letter to the SEC requesting specific changes to the regulations, as disclosed by Bloomberg. I gave a speech.
Under current guidelines, public institutions such as banks are required to report stored cryptocurrencies as liabilities and hold equivalent assets to protect against potential losses and meet capital requirements.
The coalition’s proposals to the SEC include removing certain assets from the broad definition of cryptocurrencies, particularly traditional assets that are documented or transmitted via blockchain, such as tokenized deposits, and tokens that are part of SEC-approved products, such as in-kind. Bitcoin ETF.
The proposal also proposed exempting regulated banking institutions from the obligation to list cryptocurrency holdings as liabilities on their balance sheets, while still mandating them to disclose cryptocurrency-related operations in their financial reports.