Big banks are nudging the SEC for a slice of sweet Bitcoin ETF action – Cointelegraph

Major US banks and financial institutions are asking the Securities and Exchange Commission to readjust the definition of crypto assets. This could allow it to play a larger role in the crypto space, such as acting as a custodian for Spot Bitcoin traded on recently approved exchanges. funds.

On February 14, a coalition of industry groups consisting of the Banking Policy Institute, the American Bankers Association, the Financial Services Forum, and the Securities Industry and Financial Markets Association announced that pledged Their case was addressed in a letter to SEC Chairman Gary Gensler.

The group highlighted the recent approval of Bitcoin spot trading products in the United States, noting that U.S. banks are “not participating” in the products approved as asset custodians.

“The Commission recently approved 11 Spot Bitcoin ETPs, allowing investors to access this asset class through regulated products. However, these approved products include most other ETPs. Notably absent is the banking organization as asset manager, a role it regularly plays in the United States.

The letter asked the SEC to consider amendments to Staff Accounting Bulletin 121 (SAB 121), issued in March 2022, which provides guidance on accounting for crypto custody obligations.

They noted that it has been two years since the guidance was issued, and that there have been “several relevant developments” during this period, including the approval of a spot Bitcoin ETF.

Current guidance requires banks to hold crypto assets on their balance sheets, increasing costs and hampering their ability to provide crypto custody services at scale.

Screenshot of a letter sent to the SEC by a banking industry association. Source: ABA

The group has now asked the SEC to narrow the definition of crypto assets in SAB 121 to exclude traditional assets recorded on blockchains. This prevents assets such as tokenized deposits from being subject to strict encryption guidelines.

It also requires banks to be exempt from on-balance sheet requirements while maintaining disclosure requirements, allowing them to engage in certain cryptocurrency activities while providing transparency to investors.

Related: Gold ETFs set to lose $2.4 billion by 2024 as Bitcoin ETFs hit record volumes

Matt Hogan, chief investment officer at Bitwise, said on X that the letter signals that the Bitcoin ETF has changed “the tone around crypto regulation in Washington.” commented This was a clear sign that banks were interested in joining the “digital finance wave.”

“U.S. banks are removed from key roles in Bitcoin ETFs, asking SEC to tweak guidance on holding digital assets.” totaled says Eric Balchunas, Bloomberg ETF analyst.

On the other hand, “Bitcoin Therapist” is the author of the weekly Bitcoin Newsletter. Added For emotions:

“Bankers are pissed they can’t hold spot Bitcoin ETFs for their customers. Q1’s FOMO is already pissing them off.”

According to preliminary data from the other sidetotal inflows into the newly launched Spot Bitcoin ETF just topped $4 billion, even as outflows from Grayscale accelerate.

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