Trump Greenlights U.S. Banks to Work with Cryptocurrencies

The Trump administration has eased restrictions on financial institutions dealing with cryptocurrencies by repealing accounting rule SAB 121, which previously required banks to treat Bitcoin and other digital assets as liabilities on client balance sheets.

This rule, introduced in 2022, had served as a significant barrier for Wall Street banks, raising operational costs and risks when handling virtual assets. Its repeal is expected to open the door for greater involvement by major financial institutions in the cryptocurrency market.

Efforts to revoke SAB 121 had bipartisan support in Congress, but former President Joe Biden vetoed legislation to overturn it, keeping the rule in place and discouraging banks from engaging with the crypto space. With the rule now lifted, the largest financial institutions can expand their crypto operations.

SEC Commissioner Hester Peirce, recently appointed head of a "crypto task force," welcomed the repeal, calling it a critical step for the growth of the cryptocurrency industry in the U.S. “Bye, bye SAB 121! It’s not been fun,” she posted on her X account.