A constipation of pain, not allowing US banks to custody Bitcoin, could be about to get the cream needed to abolish this ruling once Trump gets into office—and what a relief it will be for all.
SAB 121 stands as one of the most impactful yet controversial rulings in the world of digital assets. Released by the SEC, it effectively placed a wall between traditional banks and their ability to offer crypto custody services.
With banks unable to serve as trusted custodians of Bitcoin and other digital assets, the potential for institutional adoption has been blocked, causing an irritation of hemorrhoid-level proportions over time. But hold the flush—there’s a new sheriff in town, and he’s pledged to remove the suffering on Day One of his administration.
SAB 121 looks like it’s going to be removed, which I’m sure will come as a major relief for the banking community.
At its core, it was introduced to address the perceived risks of digital asset custody, by those that didn’t know what digital assets were ( or still don’t ).
The SEC highlighted concerns over cryptos’ bearer nature, where asset ownership is tied to possession, making them susceptible to theft or mismanagement. Yet, ironically, banks—the very institutions most adept at safeguarding trillions in client assets—were sidelined.
By mandating that institutions recognize liabilities and corresponding assets for client-held digital assets on their balance sheets, SAB 121 made it prohibitively expensive for banks to participate in this rapidly growing market. As a result, custody services were left primarily in the hands of crypto-native firms, leaving traditional finance on the sidelines, which we loved. But if they step in, things will change for SELF CUSTODY.
Once eradicated the landscape will changes overnight. Banks, with their unparalleled infrastructure, robust security systems, and deeply ingrained trust, would be free to step into the digital asset arena. Imagine JPMorgan, Citibank, or Bank of America not only holding Bitcoin for their clients but actively integrating it into their service offerings. Retail customers could open Bitcoin savings accounts. High-net-worth individuals could access Bitcoin-backed credit lines. Even pension funds and sovereign wealth funds—historically cautious in their approach—might find renewed confidence in investing in Bitcoin, knowing that custody is handled by institutions with a centuries-old legacy of trust.
Moreover, banks’ entry into the market would provide a massive vote of confidence for the entire crypto ecosystem. Bitcoin’s reputation would shift from a niche investment to a cornerstone asset in modern portfolios. Supply would tighten as institutions begin accumulating Bitcoin, both for their reserves and their clients. The result? A potential price surge driven by scarcity, demand, and institutional momentum.
If banks were to fully embrace Bitcoin custody, which lets be real, isn’t going to happen overnight, but when it does happend the implications would extend far beyond individual investors. Governments and regulators globally would be compelled to align with this newfound legitimacy, fostering international collaboration on crypto-friendly policies. This could lead to the acceleration of global Bitcoin adoption, as well as the proliferation of blockchain-based innovations.
For example, tokenization—the process of digitizing real-world assets like real estate, art, or bonds—could become the new standard for financial instruments. Banks, equipped with the infrastructure to custody these digital assets, could revolutionize how wealth is stored, transferred, and even fractionalized. Imagine owning a share of a high-value property or a rare piece of art, all backed by Bitcoin as a foundational asset.
Additionally, as Bitcoin transitions into mainstream portfolios, its narrative would evolve from being “digital gold” to “institutional gold.” This shift would redefine risk management strategies across industries. Financial advisors, asset managers, and even central banks could begin to treat Bitcoin as a strategic hedge against inflation or geopolitical instability, further boosting its demand and perceived value.
However, this revolution wouldn’t come without challenges. The sudden influx of institutional players might accelerate Bitcoin’s centralization, as larger entities accumulate a disproportionate share of the supply. Regulatory scrutiny would likely intensify, with governments imposing stricter oversight on how banks manage digital assets. These dynamics could spark debates around the balance between innovation and regulation, transparency and control.
Despite these hurdles, the abolition of SAB 121 could mark the beginning of a new financial paradigm. Banks’ participation would not only unlock trillions in institutional capital but also legitimize Bitcoin as a vital component of the global economy. The dream of widespread Bitcoin adoption would no longer feel like a distant hope—it would be a tangible reality unfolding in real time.
The question is, will the world be ready to embrace this transformation when the gates finally open? The clock is ticking, and the future of Bitcoin hangs in the balance.
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