Donald Trump's decree and the repeal of the Assassin Sab 121 accounting standard are very good for Bitcoin.
Promise
Donald Trump had promised that his government would stop putting sticks in the Bitcoin wheels. This is done with the decree “Strengthening American Leadership in Digital Finnish Technology”.
This decree signs the end of the famous ChokePoint 2.0 operation, an unofficial name for the overwhelming attempt to debancarize companies related to Bitcoin. Recall that the Silvergate Bank, Signature Bank and Silicon Valley Bank banks paid the price. Not to mention FTX which customers should finally be reimbursed in March.
The passage of decree Alluding to the ChokePoint operation is as follows:
“This decree orders to protect and promote equitable access and open to banking services for all citizens respectful of the law and the entities of the private sector. »»
The other big news is the withdrawal of the famous accounting standard “SAB 121” concocted in 2022 by the SEC and whose sole purpose was to dissuade banks offer bitcoins to their customers.
To understand this accounting tingling, you must first explain how the accounting system works in terms of asset care.
Sab 121
The assets held by banks on behalf of their customers are off balance sheet. Why off balance sheet? Because the bank is not the owner of the assets. It only acts as an intermediary and accounts for only childcare costs (income).
Example :
Let us put that Bank of America holds $ 10 billion in shares for its customers and that it perceives $ 50 million in childcare costs each year.
No modification of his assets or his liabilities are required. Only $ 50 million are counted as a recipe to its credit.
The problem of standard SAB 121 is that it forces banks to bring it into their balance sheet. So much so that they appear more indebted than they are really. The passive ratio/market value is deteriorated (Debt to equity ratio in English).
Quick example of distortion of the debts/market value ratio:
In the pre-Sab 121 situation, if Bank of America had 100 billion assets and $ 60 billion in liabilities, the ratio was 100/60 = 1.66. That is to say 1.66 dollar debts for each dollar in market capitalization.
If Bank of America held more than 10 billion in bitcoins, Sab 121 brought its passive to 110 billion and the ratio to 110/60 = 1.83.
And of course, a higher ratio shows the bank or the platform as more risky in the eyes of investors.
Bitcoin enters the bank
In short, SAB 121 to harm Bitcoin while shares, obligations or even gold are not faced with such unfavorable treatment.
This situation was also not blackrock's Goput which had no choice but to work with platforms of bad reputation for sound ETF Bitcoin. Knowing that the spectrum of FTX's collapse remains vivid.
Sab 121 had started to crack last September when BNY Mellon bank was able to obtain a sort of tacit exemption. Things are now clear since the SEC has just removed this assassinable accounting standard.
In other words, the valves are wide open. Banks will be able to directly offer bitcoins to those who did not want to go through questionable reputation platforms. All banks will soon offer childcare services and loans guaranteed by Bitcoins.
They could even integrate it into their own cash, as Microstrategy and a hundred other listed companies are already doing on the stock market.
Market tokénization / Bitcoins Strategic Reserve
Blackrock intends to use this upheaval to tokenize the financial markets. His CEO Larry Fink did not say anything else to Davos:
Here are the developments to be expected:
- Markets open seven days a week.
- Instant and transparent transactions.
- Self Custody of its stocks of scholarships and debt titles. This will result in a massive reduction in management costs for customers and asset managers.
Finally, let's finish by noting that the decree establishes a “Working group on digital asset markets” Directed by David Sacks.
In view of his interactions with senator Cynthia Lummis on X, he makes little doubt that he will facilitate the vote of Bitcoin Act and the creation a national bitcoin reserve. Knowing that the senator took the lead in the senatorial banking subcommittee dedicated to digital assets.
All these good news enough early allow Bitcoin to stay at the highest historic. We should expect that we were going above when the Bitcoins National Reserve is official.
Larry Fink anticipates $ 700,000 for Bitcoin…
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