SEC Advocates State Trusts for Crypto Custody
- SEC supports new custody rules, boosting crypto markets.
- Bitcoin rose by 2.5% post-announcement.
- Potential increase in institutional crypto adoption.
Uyeda’s proposal could increase competition and regulatory clarity, attracting more institutional investors to the cryptocurrency market.
Details of the Announcement
SEC Commissioner Mark Uyeda proposed that state-chartered trust companies should be allowed to act as custodians for cryptocurrencies. He emphasized enhancing competition and clarity in the regulatory framework for digital assets.
“Given the historical approach of permitting state-chartered banks to compete with federally-chartered banks, the Commission should consider allowing advisers to use state-chartered limited purpose trust companies, with the fiduciary power to custody crypto assets, as qualified custodians.” – Mark T. Uyeda, Commissioner, U.S. Securities and Exchange Commission (SEC)
Mark Uyeda, a key figure in the SEC, played a crucial role since June 2022. His stance reflects potential regulatory shifts under the new SEC chair, Paul Atkins, who is pro-crypto.
Uyeda’s statement led to a 2.5% rise in Bitcoin’s price within hours. The announcement prompted a 38% increase in trading volume, indicating strong market approval for potential regulatory changes.
Uyeda’s initiative aligns with historical actions like the OCC’s 2021 decision enabling federal banks to custody crypto, which previously led to increased institutional inflows into the market.
Experts foresee these changes might increase participation from state-chartered entities, enhancing digital asset adoption. Historical data supports potential positive market trends when regulatory clarity in crypto increases, as seen in previous custody rule changes.
