Thomas Daniels
Financial advocacy groups are pressing the SEC to revise existing accounting standards that add financial strain on American banks handling cryptocurrency assets for their customers. This movement is supported by a cross-party group of Congress members who are pushing for the repeal of these accounting norms. A collective of industry organizations, including the American Bankers Association and the Securities Industry and Financial Markets Association, has directly appealed to the SEC through a letter, as reported by Bloomberg, seeking particular adjustments to the rules.
According to the present regulations, banks and other public institutions are required to account for the cryptocurrencies they hold for clients as liabilities on their balance sheets. This necessitates setting aside equivalent assets to cover possible losses and fulfill capital obligations.
The group’s recommendations to the SEC involve excluding specific assets from the overarching category of cryptocurrencies, notably those traditional assets recorded or exchanged using blockchain technology, such as tokenized deposits, and tokens associated with SEC-approved products, like spot Bitcoin ETFs.
Furthermore, the proposal advocates for allowing regulated banks to not categorize their cryptocurrency holdings as liabilities, while still compelling them to report their cryptocurrency-related activities in their financial statements.
