Breaking! The U.S. SEC officially repeals SAB 121, allowing Financial Institutions to hold coins freely.

Policy reversal has occurred

The U.S. Securities and Exchange Commission (SEC) has just replaced the long-contested SAB 121 with the new policy SAB 122. What does this mean? Mainstream financial institutions in the U.S. can now legitimately hold cryptocurrency assets.

What is behind this change? Let's first look at the timeline:

• March 2022: SAB 121 was launched, requiring banks to list digital assets held in custody for clients as liabilities — directly turning held cryptocurrencies into bad debts.
• May 2024: The resolution to overturn was passed by members of both parties but was vetoed by the Biden administration.
• September 2024: Republican lawmakers pressure then-chairman Gensler
• Now: The new leadership team has taken office, and the policy direction has turned 180 degrees.

What It Means for Banks and the Crypto Industry

Opportunities for Banks: Bank of America CEO Moynihan has made it clear that as long as the regulatory framework is in place, U.S. financial institutions are ready to receive cryptocurrency custody business. In other words, this is a trillion-dollar new market.

Policy Details: According to the new regulations, financial institutions are required to disclose the risks and custodial obligations of holding crypto assets, but they can adopt them in advance, officially taking effect from the fiscal year starting after December 15, 2024.

What Industry Insiders Say

The chairman of the House Financial Services Committee, French Hill, bluntly stated: “Biden's unreasonable SAB 121 has finally been overturned. The requirement for reserves on custodial assets does not meet the standards of the financial industry at all.”

SEC Commissioner Hester Peirce was more direct: “Bye bye SAB 121! Never to be seen again.”

Behind this transformation, there are also personnel changes—the new acting chairman Mark Uyeda has consistently advocated for changing the SEC's strict stance on cryptocurrencies, which is completely opposite to the thinking of his predecessor Gensler.

There are even bigger things

Trump recently signed the first cryptocurrency executive order, establishing the Presidential Working Group on Digital Asset Markets, with tasks including:

1. Establish a cryptocurrency regulatory framework
2. Establish national digital asset strategic reserves (not just Bitcoin, the wording suggests possibly broader)

Bottom line

The repeal of SAB 121 is the formal recognition of cryptocurrency by the US financial system. The shift from “you are illegal” to “welcome in” signifies that the integration of traditional finance and crypto assets is irreversible. Banks, institutions, and governments are all starting to take action.