In a notable change in sentiment, Wall Street executives are expressing new optimism toward the crypto industry from just days ago. The second administration of President Donald Trump. This shift is largely due to the 47th President’s pro-quarter agenda, which represents a stark contrast to his previous skepticism during his first term.
Morgan Stanley CEO calls for increased crypto transactions
At the World Economic Forum in Davos, Switzerland, Morgan Stanley CEO Ted Beck highlighted the bank’s interest in becoming more involved in cryptocurrency transactions. he I mentioned“For us, the equation is about whether we, as a highly regulated financial institution, can act as transactions.”
Historically, banks have been cautious about engaging with crypto, largely due to regulatory uncertainties. Securities and Exchange Commission (SEC) duty More than 200 crypto-related actions have occurred since 2013, creating fear that has fueled institutional adoption.
However, with the new administration of President Donald Trump indicating a more favorable regulatory climate for digital assets, many executives are reevaluating their positions.
Trump has appointed several cryptocurrency advocates to key roles within his administration. Notable nominees include Paul Atkins for SEC Chairman, Howard Lutnick for Commerce Secretary, and hedge fund manager Scott Bessent for Treasury Department.
If confirmed, Bessent will oversee critical departments that impact tax policies and compliance for digital asset transactions, potentially paving the way for broader acceptance of digital assets.
Morgan Stanley has already taken steps to connect with cryptocurrencies, becoming the first major US bank to offer its wealthy clients access to Bitcoin funds in 2021. The company has also allowed its financial advisors to promote Exchange Traded Funds (ETFs).
Akhtar noted that as Bitcoin becomes more established in mainstream finance, its legitimacy as a financial asset will grow. “The longer you trade, the perception becomes reality,” he commented.
SEC cancels SAB 121, easing regulatory burdens for banks
Although optimistic, Major Roadblocks It remains. An important accounting rule created by the SEC in 2022 requires banks to classify cryptocurrencies as liabilities on their balance sheets, imposing strict capital requirements that prevent banks from offering crypto custody services.
Efforts to repeal that rule, known as SAB 121, gained bipartisan support in Congress but were ultimately deemed a veto by then-President Joe Biden, leaving a challenging regulatory landscape for banks.
David Solomon, CEO of Goldman Sachs, acknowledged these obstacles, saying: “Right now, from a regulatory perspective, we cannot own Bitcoin.” However, he expressed his willingness to reconsider the issue if the regulatory framework develops.
In a major development, the SEC recently repealed SAB 121, which could ease some of the burdens on banks looking to transact with digital assets.
SEC Commissioner Hester Peirce, who was hiring The leadership of the newly formed “Crypto Task Force” welcomed the decision, which signals a shift towards a more accommodating regulatory environment for cryptocurrencies.
Featured image by Dall-E, Chart from TradingView.com
