Day by day, more money is flowing into the Bitcoin ETFs from BlackRock, Fidelity & Co., which were approved a month ago. But while the coffers of the major asset managers are ringing, many American banks are on the sidelines for regulatory reasons. With an open letter, banking associations have now called on the Securities and Exchange Commission (SEC) to reassess the definition of crypto assets. In doing so, they want to secure a better role for the bull market. When the Bitcoin ETFs were approved, American banks were temporarily excluded as custodians.
The authors highlighted that US banks have not yet been able to offer custody services for Bitcoin ETFs. Instead, Coinbase is currently benefiting from the Bitcoin custody business for the nine ETF issuers. The letter therefore requests that the SEC review changes to Staff Accounting Bulletin 121 (SAB 121). Because of these guidelines, banks currently have to hold crypto assets directly on their balance sheet, which causes high costs and limits the scope of services.
What the US banking lobby is demanding
The group is therefore demanding that the SEC exempt banks from difficult accounting requirements in the future. They also want to limit the definition of crypto assets in SAB 121 so that traditional assets on blockchain are not included. This would make it easier for them to participate in the current trend of RWA tokenization. Despite the temporary absence of US banks as custodians, the new Bitcoin ETFs have Data from Farside has already recorded a total inflow of over $4 billion.
Bloomberg ETF analyst Eric Balchunas concludesthat American banks are showing increasing interest in the crypto world that was once alien to them. The latest appeal from the banking sector illustrates the increasing interest of traditional financial institutions in the crypto market. While those involved wait for new regulatory decisions, Bitcoin ETFs and the entire crypto space continue to develop positively. More and more institutional investors are considering entering the business in a bullish market environment.
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