Circle CEO pushes Trump to scrap SEC rule hindering banks from holding crypto

Circle’s Jeremy Allaire has criticized an SEC rule that he says creates financial disincentives for banks to adopt or hold crypto.

Circle CEO Jeremy Allaire believes a U.S. Securities and Exchange Commission rule is making it harder for financial institutions and companies to hold crypto, calling for it to be removed.

The rule, known as Staff Accounting Bulletin 121, makes it expensive for banks to list crypto on their balance sheets, as it requires them to treat digital assets as liabilities, leading to higher capital requirements, increased accounting and auditing costs.

In an interview with Reuters, Allaire said the rule made it “punitive for banks and financial institutions and corporations even to hold crypto assets on their balance sheet.” While USD Coin (USDC) issuer Circle has already partnered with banks for its operations, Allaire implies that the rule limits broader crypto adoption in the banking sector.

The Circle CEO hopes President Donald Trump will act quickly to address the issue, saying he’s “strongly in favor of repealing it and I would hope that President Trump would take that action.” Trump, who has promised to be a “crypto president,” is expected to issue executive orders soon to ease crypto-related regulations. However, it remains unclear when exactly these executive orders will be made.

Faryar Shirzad, Coinbase’s chief policy officer, expressed similar views, telling Reuters that the new administration “will almost certainly bring banks much more into the custodial space.” Allaire expects Congress to get more involved in shaping crypto regulations in the coming weeks.