Is that true only if they sold or lent the deposited bitcoin?
Discussion
I think that is true if they custody #Bitcoin. So if they are holding Bitcoin for their customers and Bitcoin starts ripping like it does sometimes, they would have a difficult time coming up with the required USD to be compliant.
It sounds to me like SAB121 wanted banks to never touch bitcoin, and it effectively forbade banks from just taking custody of it by assigning a value of $0 to the bitcoin on the asset side of their balance sheet but requiring mark to market accounting on the liability side…so depositing $200M of bitcoin would require bank to add $200M of non-bitcoin assets to their balance sheet to cover the deposit.
That’s lame as hell.
Worse if Bitcoin increased in value they would need to acquire more assets to cover the risk.
I suspect this was pushed by the Elizabeth Warren pro-bank regime as Gensler was her lapdog. They were so blinded by an anti-crypto mindset that they worked against the banks in this instance. It seems like it would have made more sense for their side to help banks to custody as much Bitcoin as possible to try to control a large portion of the supply (like the ETFs).
This requirement was apparently impossible for banks to meet but with the SAB121 repeal there will be many offering custody services. Bank of New York Mellon is supposed to be the first, completely built out and just waiting for SAB121 to be repealed.