Biden just abolished SAB121, and people in the cryptocurrency world seem to be angry, but why do I feel that this matter is not so bad?
What is SAB121 mainly about? Simply put, if a bank helps a customer deposit $1 billion in Bitcoin, then the bank must also have $1 billion in cash.
This is actually a bit like the 1:1 reserve of the exchange that CZ advocated before, that is, if the exchange deposits 1 billion assets of users, then it must also have 1 billion reserves, and it must be displayed openly and transparently.
For users, this is a good thing, after all, there is a guarantee. But the problem is that when the market is hot, this 100% reserve may slow things down, and American banks are not used to this, thinking that they can't make money quickly. They complained that custody of gold does not require reserves, so why do cryptocurrencies need them?
I guess some companies and traditional banks in the cryptocurrency world may think that regardless of SAB121, everyone will cooperate to make money and wait until the market is hot. But if the market collapses, then consider SAB121 to control risks.
But for law enforcers, they may feel that they would rather the market develop slowly than see the public accuse them of poor supervision after the market collapses. Biden may also think so. He has given ETF and fit21 bills a chance and thinks that it is enough now. It should not be too biased towards cryptocurrencies, so as not to be criticized by the public and the SEC (Securities and Exchange Commission).
Speaking of the currency circle, big players like CZ have a large business, so user security is very important, and it is also cost-effective to have 100% reserves. But those small exchanges may just want to make money quickly, and they will not do it if they don’t have much money to make reserves. This is like big brand food values safety, and small brands think about how to attract customers to buy.
So, I think there is no big problem with Biden insisting on SAB121. As an ordinary investor, I have nothing to blame.
