SAB 121 repealed, a Bitcoiner leads the Senate Subcommittee, the Crypto Executive Order

...yesterday was quite the day for good crypto news

“I’m not young enough to know everything.” – JM Barrie ||

Hello everyone, and happy Friday!! Finally, right? I hope you have good things planned for the weekend, I have no doubt you’ve earned them.

Sigh, today I WAS going to share the regular crypto-macro update on key developments in stablecoins over the past few weeks. My aim is to do one review a week, separating signal from noise and covering tokenization, stablecoins, CBDCs and regulation.

BUT big news from Washington DC came thick and fast yesterday, which pushes the stablecoin overview out a few days.

Below, I look at the three main regulatory steps forward for crypto from yesterday alone – this pace is quite astonishing.

IN THIS NEWSLETTER:

• Clearing the way: SAB 121 repealed

• A Bitcoiner to lead the Senate Digital Assets Committee

• The Crypto Executive Order does not disappoint

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WHAT I’M WATCHING:

Clearing the way: SAB 121 repealed

Three big things happened in Washington DC yesterday, each of which hints at a coming slew of announcements from traditional finance as well as crypto startups signaling both new investment flows and broader adoption.

Yesterday, the US Securities and Exchange Commission (SEC) rescinded its accounting guideline SAB 121. In place since 2022, this effectively blocked banks from custodying crypto assets by insisting that they boost their capital reserves by the amount necessary to offset each dollar worth of crypto that they were holding on behalf of clients – in other words, banks were asked to provision for assets that were not theirs, and were not on their balance sheets.

Capital reserves are expensive (it’s money that isn’t doing anything), so of course this guideline killed plans to offer that service as the foregone income would not be offset by the potential fees at market rates. Institutional holders of crypto assets were denied the convenience and comfort of a trusted, familiar name. This was good for Coinbase and other crypto-native institutional custody services, but it also kept many mainstream investors on the sidelines.

The accounting guideline was so nonsensical that a proposal to repeal it passed both the House and the Senate, with bipartisan support – but then Biden overruled the votes.

With the guideline now revoked, banks will be able to offer crypto custody services to their clients. We know this is something bank clients have been asking for, and we know it is a service many big-name banks were gearing up to offer when their plans were scuppered. Some have probably been reopening files and reassigning people for the past couple of months in expectation of this move, so we could see announcements soon.

Why is this good for crypto? For two main reasons: