Bloomberg: Several U.S. banking unions urge the country’s regulators to change crypto asset accounting standards

U.S. industry alliances including the Bank Policy Institute, the American Bankers Association, the Securities Industry and Financial Markets Association and the Financial Services Forum sent a letter to the U.S. Securities and Exchange Commission (SEC) on Wednesday urging it to adjust accounting guidance to avoid raising the number U.S. banks hold for customers. The cost of the asset. The regulator is already facing pressure from Democrats and Republicans in Congress to rescind the guidance. Existing guidelines require public companies, including banks, to count the cryptocurrencies they have in custody as liabilities on the company’s balance sheet. This means banks must set aside an equal amount of assets to protect against losses in order to meet capital requirements. The groups have asked the SEC to make the following key changes: 1. Exclude certain assets from broad cryptocurrency protections. This includes any traditional assets recorded or transferred using blockchain networks (such as tokenized deposits) and U.S. Any token underlying an SEC-approved product, such as a spot Bitcoin exchange-traded fund. 2. Exempt regulated lenders from current balance sheet requirements while maintaining the requirement for companies to disclose their cryptocurrency activities in financial statements. "If regulated banking organizations are effectively prevented from providing digital asset protection services at scale, investors and customers, and ultimately the financial system, will be worse off," the trade groups said in the letter. The regulator said its accounting guidance was necessary because cryptoassets pose unique risks and uncertainties compared with other assets held by banks for their clients. U.S. Securities and Exchange Commission Chairman Gary Gensler said in an interview with Bloomberg on Wednesday that the crypto industry lacks appropriate and required disclosures related to securities. (Bloomberg)