During a Senate hearing today, the Chair of the Securities and Exchange Commission (SEC), Gary Gensler, was quizzed about an SEC staff accounting bulletin relating to cryptocurrencies. Banks have treated this accounting rule as impacting bank capital requirements. Gensler said it is purely for accounting purposes and is up to banking regulators to decide on bank capital requirements.
Staff Accounting Bulletin No. 121 was published in March 2022, and states that cryptocurrency should be disclosed as both an asset and a liability. Other assets held under custody are not shown within the balance sheet.
As Senator Lummis noted, the Federal Reserve Chair Jerome Powell previously acknowledged that the SEC balance sheet treatment of crypto is not the norm.
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