Circle CEO Criticizes SEC Rule for Hindering Crypto Adoption in Banking Sector

Crypto adoption in the banking sector is being hindered by a U.S. Securities and Exchange Commission (SEC) rule, according to Circle CEO Jeremy Allaire. The rule, known as Staff Accounting Bulletin 121, makes it expensive for banks to list crypto on their balance sheets, leading to higher capital requirements and increased accounting and auditing costs.

Financial Disincentives for Banks

The rule requires banks to treat digital assets as liabilities, which creates financial disincentives for banks to adopt or hold crypto. According to Allaire, this makes it “punitive for banks and financial institutions and corporations even to hold crypto assets on their balance sheet.”

While USD Coin (USDC) issuer Circle has already partnered with banks for its operations, Allaire believes the rule limits broader crypto adoption in the banking sector. He hopes that President Donald Trump will act quickly to address the issue, saying he’s “strongly in favor of repealing it and I would hope that President Trump would take that action.”

Expected Regulatory Changes

President Trump, who has promised to be a “crypto president,” is expected to issue executive orders soon to ease crypto-related regulations. However, it remains unclear when exactly these executive orders will be made. Faryar Shirzad, Coinbase’s chief policy officer, expressed similar views, telling Reuters that the new administration “will almost certainly bring banks much more into the custodial space.”

Allaire expects Congress to get more involved in shaping crypto regulations in the coming weeks. To stay up-to-date on the latest developments in the crypto space, visit Global Crypto News for more news and insights.

“Punitive for banks and financial institutions and corporations even to hold crypto assets on their balance sheet.” – Jeremy Allaire, Circle CEO

Tips for Crypto Investors

As the regulatory landscape continues to evolve, it’s essential for crypto investors to stay informed. Here are some tips to keep in mind:

  • Stay up-to-date on regulatory changes and their potential impact on the crypto market.
  • Consider the potential risks and benefits of investing in crypto and stablecoins like USDC.
  • Diversify your investment portfolio to minimize risk and maximize potential returns.
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