Yesterday the House Financial Services Committee passed a resolution to reject the SEC’s accounting rule that prevents banks from providing digital asset custody. Members of Congress from both sides of the House proposed the resolution, although several Democrats objected. The final vote in favor was 31 to 20. The resolution will be binding once the full House and Senate approve it. Judging by a letter to the SEC from various banking and securities federations earlier this month, the industry thinks this will take time.
Last year the Government Accountability Office (GAO) ruled that SAB 121 should have been subject to Congressional review.
Staff Accounting Bulletin (SAB) 121 requires all companies, not just banks, to put digital assets held in custody on their balance sheet as both an asset and liability. That is unheard of in accounting. Given banks have regulations setting capital requirements based on their balance sheet, this makes custody prohibitively expensive.
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