BNY Mellon, the largest custodian bank in the U.S., has been granted a variance from the SEC’s Staff Accounting Bulletin (SAB) 121. This exemption, discussed during Wyoming’s Select Committee on Blockchain’s latest session, paves the way for the bank to enhance its role in institutional crypto custody. Chris Land, general counsel for U.S. Senator Cynthia Lummis, confirmed that this move signals broader regulatory acceptance for digital asset services.

The exemption from SAB 121, which typically mandates that crypto assets be listed on a custodian’s balance sheet, removes a major compliance hurdle for BNY Mellon. The bank, actively expanding its digital asset services, now has the green light to handle more institutional crypto custody under relaxed regulatory constraints. This development could serve as a benchmark for other financial entities seeking similar exemptions to operate within the crypto space efficiently.

This regulatory nod could significantly boost the adoption and integration of digital assets within traditional banking frameworks, marking a potential shift towards more widespread institutional acceptance of cryptocurrencies. The move by regulators could encourage more banks to explore the rapidly evolving digital asset sector.