The rise in cryptocurrencies has also prompted banks in the United States to take action. Banks that hold cryptocurrencies on behalf of customers have now expressed their regret in a joint letter to the #SEC in order to change the relevant rules.
In the #US banks, through their associations, have written a letter to the Securities and Exchange Commission (SEC) stating that they want the rules on storing cryptocurrencies and digital assets to change.
The “coalition”, which includes the Banking Policy Institute, the American Bankers Association, the Securities Industry and Financial Markets Association, and the Financial Services Union, sent a letter to the SEC calling for various changes.
They have to keep as much money as the crypto they keep
Currently, in the US, companies that have had initial public offerings, including banks, must show the cryptocurrencies they store on their corporate balance sheets and pay obligations. This means that banks are subject to the obligation to keep the amount as much as the value of the held cryptocurrencies or digital assets as extra cash.
The letter from the banking groups to the SEC stated the issues that need to be changed as follows:
*Excluding assets entering the cryptocurrency space from this obligation... The assets mentioned here are specified as assets that can be transferred using the blockchain network. These can be traditional tokenized financial assets or SEC-approved tokens or spot Bitcoin ETFs.
The obligation of companies to disclose their crypto activities in their financial statements may continue, but to exempt lending firms (banks) subject to regulation from the balance sheet obligation.
"The financial system is badly affected”
Banking groups have also stated that the financial system will be worse affected if these rules are not changed:
“If the regulated banking institutions are prevented from storing digital assets, investors and customers, and therefore the financial system, will be badly affected by this situation”
SEC insists, banks object
this regulation, announced in 2022, is considered mandatory by the SEC. The institution notes that cryptocurrencies carry their own unique risks , and they cannot be considered the same as other assets held by banks. Banks, on the other hand, have been opposing this set of rules from the very beginning, stating that these rules impose heavy financial burdens.
Bank of New York Mellon, one of the oldest banks in the United States, which opened a digital asset storage platform in 2022, stated that activities in this area have very minimal effects compared to their overall business.
Another big bank, State Street, had taken some redundancy steps in its digital assets department. Jay Biancamano, the former director of the department, wrote in a LinkedIn post in January, “The field of digital storage and tokenization is far beyond our time... Unfortunately, we cannot predict the tides in this area,” he said.
