Yesterday the SEC published guidance about how corporations should account for the custody of crypto-assets on behalf of clients. If other regulators, such as the Basel Committee, concur with the SEC’s position, crypto custody could become unattractive for banks. Currently, the Basel Framework considers custody as out of scope.
That’s because banks have regulatory requirements to have a certain amount of equity which partly depends on the makeup of their balance sheet. The SEC says these crypto-assets should appear as both an asset and a liability. In contrast, the custody of conventional assets does not touch a balance sheet.
Coincidentally, this announcement was made the same day that the world’s largest custodian BNY Mellon revealed its first big crypto custody deal to be the primary custodian for the USDC stablecoin, which has a market capitalization of $52 billion.
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