Regulation
Will SAB 121 Abolition Allow Banks To Hold Bitcoin
Donald Trump’s crypto policies have ignited a sense of optimism within the industry, hinting at a new era of growth and innovation. The US Securities and Exchange Commission’s decision to rescind SAB 121 has further fueled confidence. Experts hope that the abolition of SAB 121 will pave the way for the establishment of Bitcoin banks.
Notably, Stacy Herbert, Director of El Salvador’s Bitcoin Office, has expressed hopefulness about banks holding Bitcoin. Her statement reflects a general excitement surrounding the integration of Bitcoin and other cryptocurrencies into the US banking industry.
SAB 121 Rescission Greenlights Bitcoin Banking
In a recent X post, Stacy Herbert, the Director of Bitcoin Office, El Salvador, commented on the potential acceptance of Bitcoin in financial institutions. While her optimism is mainly driven by the SEC’s recent abolition of SAB 121, Herbert stated, “Bitcoin banks are coming.”
Herbert’s post came in response to MicroStrategy founder Michael Saylor’s X thread on the withdrawal of SAB 121. She emphasized the benefits of Bitcoin banks, suggesting that integrating Bitcoin into traditional banking could potentially boost investments.
SEC Withdraws SAB 121, Releases SAB 122
In a phenomenal development, the US SEC withdrew Staff Accounting Bulletin No. 121 and released Staff Accounting Bulletin No. 122. While SAB 121 restricted banks’ custody of cryptocurrencies, SAB 122 reverses the rule that forced entities to log a liability when protecting client crypto assets.
SEC Commissioner Hester Peirce, who now lead the newly formed Crypto Task Force, responded to the SAB 121 abolition with an X post that read, Bye, bye SAB 121! It’s not been fun.”
Bye, bye SAB 121! It’s not been fun: https://t.co/cIwUc0isUE | Staff Accounting Bulletin No. 122
— Hester Peirce (@HesterPeirce) January 23, 2025
Similarly, Senator Cynthia Lummis expressed her contentment with the SEC’s action, stating,
SAB 121 was disastrous for the banking industry, and only stunted American innovation and advancement of digital assets. I am THRILLED to see it repealed and get the SEC back on track to fulfilling its intended mission.
Trump Government Fights Operation Chokepoint 2.0
Joe Biden’s administration has been accused of stifling the crypto industry by pressuring banks to sever ties with crypto businesses, a move critics have dubbed “Operation Chokepoint 2.0. Coinbase CEO previously said that the Biden government was trying to “kill” the entire crypto ecosystem. The SEC’s SAB 121 was also such a move that stifled the crypto economy.
However, the US lawmakers have recently launched investigations into the matter, examining the government’s regulatory overreach. While many including Brian Armstrong, Hayden Adams, and Paul Grewal have openly raised voices against Operation Chokepoint 2.0, the US Oversight Committee pledged to address the issue.
Regulatory Shifts Mark the Future of Bitcoin Banks
Trump’s executive order that focuses on crypto has ushered in a new era of crypto markets in the US. Recently, the President signed an executive order to develop a national digital asset stockpile, sparking community enthusiasm. These policy shifts, especially the abolition of the controversial SAB 121, signal the emergence of Bitcoin banks.
In anticipation of the US banking industry’s adoption of crypto, Draper University Founder Tim Draper stated,
Goodbye to SAD SAB 121. We welcome banks to the new world of Bitcoin. Banks don’t have to pretend that the dollar is better anymore.
Moreover, Bank of America CEO Brian Moynihan’s assurance that the US banking industry would embrace cryptocurrencies upon regulatory approval has bolstered hopes for mainstream adoption. Circle CEO Jeremy Allaire also remains bullish on the financial institutions’ endorsement of digital assets.
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Nynu V Jamal is a passionate crypto journalist with three years of experience in blockchain, web3, and fintech spheres. She has established herself as a knowledgeable and engaging voice in the cryptocurrency and blockchain space. Her experience as an Assistant Professor in English Language and Literature has further added to her quest for crafting informative, well-researched, and accessible content.
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Ripple has secured Money Transmitter Licenses (MTLs) in New York and Texas, marking another step in its U.S. expansion.
These licenses, crucial for offering compliant cross-border payment services, strengthen Ripple’s ability to provide financial institutions and crypto businesses with faster and more efficient payment solutions.
Ripple Secures Money Transmitter Licenses in Two Key States
According to a company statement, Ripple has gained approval for Money Transmitter Licenses (MTLs) in New York and Texas. These licenses enable Ripple Payments customers to access licensed versions of its cross-border payments platform, ensuring that transactions are managed entirely by Ripple on their behalf.
Ripple stated that New York and Texas have seen growing demand for real-time global payment solutions, particularly from banks and crypto businesses. The licenses add to Ripple’s extensive regulatory compliance portfolio, including more than 55 MTLs globally, of which 33 are in the U.S. Additionally, Ripple holds a New York BitLicense and a Limited Purpose Trust Company Charter.
Joanie Xie, Ripple’s Managing Director for North America, commented, “We’re seeing more interest from financial institutions and crypto companies ready to embrace the benefits of blockchain and digital assets.”
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- Bitpanda announced it secured approval as MiCA compliant from Germany’s BaFin.
- Crypto.com revealed its full-MiCA license via X on Monday.
- Other platforms have also secured the key regulatory registration following full rollout in December 2024.
Crypto.com and Bitpanda have received approval as Markets in Crypto Assets (MiCA) licensed exchanges, according to announcements from the two companies on Monday.
The Crypto.com team said it had received the full MiCA license. This comes just days after the exchange announced it secured in-principle authorisation from the Malta financial markets regulator.
Bitpanda said in a blog post it had received approval from the German Federal Financial Supervisory Authority (BaFin).
Exchanges get MiCA nod
Approval sees the exchanges add to the growing number of crypto platforms and service providers getting a nod for expansion across the European Union. This follows the rollout of full MiCA laws across the EU at the end of 2024, with multiple exchanges among those to reveal plans for compliance.
MiCA approval allows providers to offer their products and services in the European Economic Area (EEA), a major market for crypto.
Bitpanda deputy chief executive officer Lukas Enzersdorfer-Konrad said in a statement:
“This achievement is the result of a decade of commitment to compliance and regulation. With MiCAR, we are not just meeting the industry’s highest standards, we are setting them. Our focus now is on using this licence to accelerate adoption and growth across the European market.”
Bitpanda and Crypto.com join Boerse Stuttgart Digital, MoonPay, OKX and Hidden Road on the list of crypto platforms to have received MiCA licenses.
The crypto community is amazed by the reports of zero capital gains tax on U.S.-based crypto projects. The move comes amid Donald Trump’s decision to make crypto a national priority regarding crypto policy and regulations, starting with signing an executive order to develop the national digital asset stockpile. However, experts claim cryptocurrencies and crypto projects developed in the United States may not see zero tax benefits.
Why Is Zero Capital Gains Tax on Crypto May Not Be Possible
Dennis Porter, CEO and co-founder of Satoshi Action Fund, in an X post on January 26 said removing capital gains on crypto entirely depends on US Congress. He asserts it is highly unlikely that the US Congress will include such a proposal in a tax bill in the near term.
He added that the primary obstacle is the significant loss in government tax revenue, making the proposal look difficult to approve currently. The primary agenda for the Trump administration is tax cuts and any policy that threatens those cuts will be sidelined.
The zero income tax on crypto presents significant practical, legal, and economic challenges. The Trump administration will review the anticipated reduction in tax on US-based crypto but not vice-versa, which could be detrimental to equities, bonds, and other financial instruments.
Eric Peterson, policy director at Satoshi Action Fund, said:
Capital gain taxes on crypto is not going to 0% folks. Congress makes tax policy, not the president. Work towards attainable goals like the de minimis exemption.
Recently, John Deaton discussed the ambiguity surrounding U.S.-based cryptocurrency projects. He questioned whether projects with operations or foundations abroad, such as Solana and Tezos, would meet the requirements for tax exemptions.
The Crypto Industry Must Lobby for Meaningful Steps Forward
Dennis Porter believes the crypto industry can take meaningful steps forward to reduce tax obligations. He suggests securing a de minimis exemption of $200 for Bitcoin and other digital asset transactions.
“This proposal aligns with the existing $200 exemption for foreign currency transactions. It’s a far more attainable and reasonable goal, with minimal impact on Trump’s ability to renew his tax cuts,” he added.
Americans who live off of Bitcoin and digital assets should not have to report every small transaction, such as buying coffee, meals, or groceries, for tax purposes. This is an overly burdensome task and it’s time we pursue this simplification of the tax code.
Porter reveals that the U.S. Congress has bipartisan support for this idea and it could become a reality with de minimis exemption. In order to be successful, it must be tied to inflation and bipartisan support that balances innovation and fairness.
Crypto Market Bullish on Zero Crypto Gains Tax Proposal
The crypto market participants are bullish on the US-based crypto and likely zero tax on these crypto as the Trump administration introduces pro-crypto policy and regulations.
Eric Trump confirmed advocating for zero capital gains tax for the U.S.-based crypto projects. ‘Made In USA’ crypto such as XRP, Solana (SOL), Hedera (HBAR) and others will benefit from tax cuts. As per CoinGecko, the US-based crypto market cap is over $560 billion.
Meanwhile, Eric Trump hinted at a 30% capital gains tax on non-US crypto projects. As per experts, this sharp divide is designed to attract global crypto investments to the United States.
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