Bitcoin Not Crypto SAB 121 Revoked! What does this mean for $BTC $MSTR
Jan 25, 2025
The recent revocation of Staff Accounting Bulletin 121 is set to simplify how banks account for digital assets, fostering more crypto custody services. Traditional finance's entry into this space may reshape market dynamics and borrowing costs. With banks increasingly viewing Bitcoin as a key asset, its role in financial systems is poised for disruption. Optimism surrounds catalysts like a spot ETF and fair value accounting, which could propel Bitcoin's price to unprecedented heights in just a few years.
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SAB 121's Impact
- SAB 121 discouraged financial institutions from holding Bitcoin by requiring them to report it as both an asset and a liability.
- This inflated balance sheets and made it complicated for banks to offer custody services, potentially hindering wider adoption.
SAB 122 Simplifies Accounting
- SAB 121 was revoked and replaced by SAB 122, simplifying accounting for digital assets.
- Institutions can now apply standard accounting practices, removing the dual asset/liability reporting requirement.
Increased Competition
- SAB 122 will likely increase competition in the crypto custody space.
- Traditional financial institutions will offer custody services, challenging companies like Coinbase.