US wants banks to hold Bitcoin, not exchanges

Not long ago we saw the news about the suit of the SEC of the United States against the founder of Terra for fraud and now we return with it. And it is that, the Securities and Exchange Commission has proposed a new law that will cause important changes in federal regulations on cryptocurrencies. In this case we talk about the cryptocurrency exchanges would not be considered suitable for its custodian and the law proposes that other entities such as banks be the regards of store bitcoin.

Although cryptocurrency mining has almost completely disappeared due to low profitability, the exchange platforms (exchanges) are still very active. But of course, this type of market moves millions of dollars and in countries like USA want to have a greater control over Bitcoin. Perhaps this is one of the reasons why the US Securities and Exchange Commission (SEC) is willing to change the current regulations.

The SEC wants Bitcoin custody to be in charge of banks

SEC Chairman, Gary Genslerhas proposed to modify the federal requirements of cryptocurrency custody. This implies a major rule change that would affect how possession of crypto assets by US citizens is stored and recorded. The SEC voted 4-1 in favor for this bill and although it has not received final approval, it will give a lot to talk about. And it is that, it will implement a series of rules to qualify which entity is in charge of the custodian. This boils down to basically eliminating exchanges as custodians of cryptocurrencies.

With this law, the SEC will admit as a qualified custodian of Bitcoin to licensed banks or registered stockbrokers. With this new bill by the SEC, it seeks to prevent cryptocurrency exchanges from having this power. They offer institutional custody programs for high net worth individuals and entities. According to Gary, crypto asset lending and exchange platforms would not be qualified custodians. To achieve this, the institution must have the statutes or be qualified as a registered stockbroker.

Some members of the SEC oppose this bill

This new bill has created different points of view, because even within the SEC, there are those who oppose it. Among these, we have the commissioner Hester Pierce, who does not entirely agree. On the one hand, it indicates that not enough time has been given for the new standard to be analyzed and, on the other, it indicates that there will be custody issues. Additionally, it questions its operation, since the change would imply making the custodians and advisors sEsports Extrasin writingentailing sums of time and money for each agreement.

Pierce also rejects the SEC’s bill to let banks hold Bitcoin. Well, with this change, investors will have to remove the assets from the platforms where they were protected. Although this regulation aims to create a series of custodians qualified as legal, it also does not take into account a fundamental factor. This would be the fact that qualified custodians did not meet all the requirements and in the end they are not as secure as expected.