In Case of SAB 121 Rejection, FDIC Nominee Goldsmith Romero Says Banks Can Custody Digital Assets

During a July 11 hearing, Christy Goldsmith Romero, the nominee for Federal Deposit Insurance Corporation (FDIC) chair, stated her support for banks to custody crypto assets. She remarked that crypto is "another business just like any other business" and emphasized that it is not the FDIC’s role to dictate which assets banks should hold.

Romero's testimony comes at a critical juncture

Romero’s testimony coincided with Congress's failure to overturn President Joe Biden’s veto of the Staff Accounting Bulletin-121 (SAB-121) repeal. The vote fell 60 votes short of the required two-thirds majority.

SAB-121 is an SEC rule that mandates banks holding crypto assets to record these assets as liabilities on their balance sheets. This requirement indirectly discourages banks from holding digital assets on behalf of customers.

Multiple organizations speak out

The Digital Chamber, a Washington, DC-based crypto advocacy group, had previously expressed interest in Romero’s nomination due to her progressive stance on the crypto industry. They highlighted her forward-thinking views in a letter to the Senate Committee on Banking, Housing, and Urban Affairs.

Senator Cynthia Lummis was the only one to mention crypto explicitly during the nomination hearing, which also evaluated candidates for roles at the FDIC, SEC, U.S. Treasury, and the Financial Stability Oversight Council.

Cryptocurrency has a huge impact

Cryptocurrencies have gained national prominence and have become a significant campaign issue, particularly since former President Donald Trump labeled himself "the crypto President." This has sparked a politically charged environment, with industry executives engaging with lawmakers and launching political initiatives such as The Bitcoin Voter Project and the Stand With Crypto political action committee.

The US regulatory landscape may change

The Supreme Court recently overturned Chevron USA Inc. vs. Natural Resources Defense Council, reversing a 40-year precedent that allowed federal regulatory agencies to create rules without Congressional approval. This decision could have far-reaching impacts on the regulatory landscape in the United States.

Christy Goldsmith Romero, the FDIC chair nominee, expressed support for banks custodial holding of crypto assets, stating it is not FDIC's role to dictate asset custody.