A House Committee in the US overturned an earlier rule of a US regulator that did not allow banks to custody crypto in a move that could benefit both the crypto industry and banks alike.
A United States Securities and Exchange Commission (SEC) rule did not allow banks in the country to custody crypto. But digital assets custody rules in the US will likely be more liberal as a House Committee has made it possible recently. The House Financial Services Committee (HSFC) voted to change the existing rule in the US. Thirty-one members voted in favor of the resolution, while twenty others voted against it.
The Committee said in an official statement, “By overturning SAB 121, the Resolution will ensure consumers are protected by removing roadblocks that prevent highly regulated banks from acting as custodians of digital assets.”
Lawmaker Mike Flood, who introduced the new resolution, spoke extensively on why it was important. He said the SEC’s guidelines mandated crypto custodians to record such assets as liabilities on their balance sheets. He further explained how banks usually held these assets off their balance sheets. Hence, it was not possible for them to custody digital assets as it would create liquidity and capital issues.
As a result, the new rule changes could be significant as a big step ahead for crypto adoption. Earlier, two German banks, DZ Bank and Deutsche Bank, also opted to start offering crypto custody solutions for their clients.
Moreover, the development in the US did not come as a surprise. Lawmakers have proactively advocated for crypto adoption through transparent regulation in recent months. A recent digital assets mining bill also emerged in the US Congress, which counts as an encouraging sign.
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