BNY Mellon, the largest U.S. custodian bank, has recently been granted an exemption from a controversial SEC rule that could potentially pave the way for bank custody of Bitcoin and other cryptocurrencies. This exemption from the Staff Accounting Bulletin No. 121 (SAB 121) is a significant development in the institutional custody of digital assets in the United States.
The SEC’s SAB 121 previously required entities holding customer crypto to report such holdings as corporate liabilities and disclose the type of crypto safeguarded along with its valuation. However, BNY Mellon’s exemption from these requirements could signal a shift in the regulatory landscape, allowing major U.S. banks to offer custody services for cryptocurrencies.
Michael Saylor, the founder of MicroStrategy and a prominent figure in the crypto space, has suggested that one or more mainstream banks may soon receive approval to custody crypto assets. This development could not only accelerate the adoption of Bitcoin but also potentially impact its spot price.
The news of BNY Mellon’s exemption comes amidst ongoing criticism of U.S. authorities for their regulatory stance on cryptocurrencies, with industry proponents decrying what they refer to as “Operation Choke Point 2.0” – a regulatory agenda aimed at excluding crypto from the traditional financial system.
Saylor has previously outlined three catalysts that he believes are necessary for Bitcoin to reach $5 million per coin, with bank custody being one of them. If major banks in the U.S. are indeed granted permission to custody Bitcoin, it could be a significant step towards achieving this ambitious price target.
Overall, BNY Mellon’s exemption from SAB 121 requirements has the potential to reshape the landscape of institutional crypto custody in the U.S. and could have far-reaching implications for the future of digital asset adoption in traditional financial institutions.