Big Banks Lobby for Role in Bitcoin ETF Custodianship

    Major U.S. banks lobby the SEC for a role in Bitcoin ETF custodianship, highlighting a shift in Washington's approach to crypto regulation. The coalition urges revisions to crypto asset definitions and on-balance sheet requirements, reflecting a growing FOMO in the financial sector.

    • Financial Institutions FOMO: Major U.S. banks express interest in becoming custodians for spot Bitcoin ETFs.
    • SEC Petition: Coalition of trade groups urges SEC Chair Gary Gensler to revise crypto asset definitions, emphasizing banks’ exclusion from Bitcoin ETF custodianship.
    • Guidance Modification: Request to revisit and modify Staff Accounting Bulletin 121 (SAB 121) to ease on-balance sheet requirements for digital assets held by banks.
    • FOMO Impact: The push for involvement in the growing crypto market signifies a shift in Washington’s tone on crypto regulation.

    Banks Petition SEC for Crypto Revisions

    Financial institutions, led by the Bank Policy Institute and others, are lobbying the SEC for a pivotal role in the rapidly expanding market of spot Bitcoin ETFs. A letter sent to SEC Chair Gary Gensler highlights the absence of U.S. banks as custodians for these ETFs, calling for a reevaluation of crypto asset definitions. The coalition emphasizes the need to modify Staff Accounting Bulletin 121, issued in 2022, to alleviate on-balance sheet requirements for digital assets.

    FOMO Grapples Banks with Crypto ETFs’ Exclusion

    In a noteworthy development, major banks are grappling with a fear of missing out (FOMO) as they observe the surge in spot Bitcoin ETFs. Bitwise’s CIO, Matt Hougan, notes a significant shift in Washington’s attitude towards crypto regulation. However, the Q1 FOMO is pressuring banks unable to hold BTC ETFs for their clients, signaling a growing desire to participate in the digital financial wave.

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