Wall Street Institutions Demand SEC to Change Crypto Guidelines
In the midst of a bull run in the crypto markets, major Wall Street institutions have written a letter to the Securities and Exchange Commission (SEC) urging them to revise the current accounting guidelines related to digital currencies. The letter, signed by prominent trade associations including the American Bankers Association and the Securities Industry and Financial Markets Association, requests several adjustments to increase the cost of US banks holding digital assets on behalf of their clients.
Current Rules Hinder Banks from Offering Bitcoin ETFs
Under the current guidance, banks are required to record the cryptocurrencies they own as liabilities on their balance sheets. This poses a challenge for banks to meet their capital requirements, as they must set aside assets of equal value. This rule prevents regulated institutions from offering Bitcoin ETFs and other crypto-related products. The proposed changes seek to exclude certain assets from the definition of cryptocurrency and preserve the requirement for businesses to disclose their crypto activity in financial statements.
Institutional Demand Reflects Rising Interest in Crypto
The demand for changes in crypto regulations by major financial institutions coincides with a surge in demand for crypto assets. Bitcoin, in particular, has experienced steady growth and recently surpassed $52,000. This demonstrates increasing market confidence and investor appetite for the flagship cryptocurrency. The market cap of Bitcoin has also reached $1 trillion once again, highlighting improved investor confidence. These developments further emphasize the need for regulatory adjustments to accommodate the growing interest in cryptocurrencies.
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