Regulation
Crypto industry cheers as Senate rolls back SEC rule threatening custodial services
- The US Senate has repealed SEC guidance that could have required banks to list their customers’ cryptocurrency assets on their balance sheets.
- The move is seen as a victory for banks and the cryptocurrency industry, as it protects custodial services and promotes innovation.
In a crucial decision, the US Senate voted to repeal the Securities and Exchange Commission (SEC) guidelines known as SAB 121. These directives, which had been heavily criticized, would have required banks to record their clients’ cryptocurrency holdings on their balance sheets. Critics have argued that this requirement would overburden banks by exposing them to high volatility inherent to cryptocurrencieswhich could distort their financial statements.
Industry leaders celebrate regulatory relief
The Senate’s decision was widely welcomed by the cryptocurrency industry. In a recent CNF YouTube video, Ripple’s chief legal officer Stuart Alderoty celebrated the vote as a major victory over what he described as unwarranted interference by the SEC. Similarly, SEC Commissioner Hester Peirce, a known proponent of digital assets, has criticized the SEC’s inconsistent regulatory strategies. This bipartisan action highlights a concerted effort to establish balanced regulation of digital assets that promotes innovation while protecting investors.
Implications for financial institutions and Ripple
This legislative change is expected to significantly ease operational complexities for banks managing cryptocurrency custody services. Prior to this decision, the impending requirement (SAB 121) had been criticized by both the banking and cryptocurrency industries. Figures like Michael Saylor, co-founder of MicroStrategy, have expressed strong support for the Senate’s decision, emphasizing the importance of protecting the rights of cryptocurrency owners.
Consistent with previous reports from the CNF last May, there has been widespread speculation that the Biden administration could veto any bill allowing regulated financial companies to hold Bitcoin, sparking a broader debate over cryptocurrency regulation. However, the Senate’s action has clarified the legislative position for now.
Ripple Market Performance
At the time of writing, Ripple (XRP) is priced at $51.85having jumped from 0.05% during the last day and 0.78% last week. This positive trend highlights Ripple’s stability and growing confidence in its future. in a context of regulatory clarity.
In conclusion, the Senate’s decision to cancel the The SEC’s strict rule on the custody of cryptocurrencies marks an important step towards the creation of a favorable regulatory environment. This change promises to strengthen innovation and provide a more stable foundation for the growth of digital assets.