June 23, 2022

Nellie Liang
Under Secretary for Domestic Finance
Department of the Treasury
1500 Pennsylvania Avenue NW
Washington, D.C. 20220

Mark E. Van Der Weide
General Counsel
Board of Governors of the Federal
Reserve System
20th Street and Constitution Avenue
NW
Washington, D.C. 20551

Harrel Pettway
General Counsel
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, D.C. 20429

Benjamin W. McDonough
Senior Deputy Comptroller and Chief
Counsel
Office of the Comptroller of the
Currency
400 7th Street SW
Washington, D.C. 20219

Re: Staff Accounting Bulletin No. 121 Issued by the Staff of the Office of the Chie Accountant of the Securities and Exchange Commission

Ladies and Gentlemen:

The American Bankers Association, Bank Policy Institute and the Securities Industry and Financial Markets Association (the “Associations”) write to call attention to issues arising from the new Staff Accounting Bulletin No. 121 (“SAB 121” or “the SAB”) issued by the staff (“SEC Staff”) of the Office of the Chief Accountant of the Securities and Exchange Commission (the “SEC”).1 In particular, this letter and its appendices follow preliminary discussions that the Associations have had with SEC Staff, and staff of the Office of the Comptroller of the Currency
(“OCC”), the Federal Deposit Insurance Corporation (“FDIC”) and the Federal Reserve Board (the “FRB” and, collectively with the OCC and the FDIC, the “Banking Agencies”) and
Department of the Treasury, and respond to staff requests for more information and analysis.

The Associations fully support the SEC’s goal of helping to ensure that investors receive
appropriate protections, including full and transparent disclosure regarding the risks that may arise from activities related to crypto-assets. The scope of assets that fall within the SAB’s definition of “crypto-assets”, however, is overly broad because there are a range of tokenized and digitally native versions of traditional assets (e.g., securities) that could fall within the crypto-asset definition where the risks described in the SAB are addressed today.2 Tokenized and digitally “native” versions of traditional assets operate within the existing banking infrastructure and legal and regulatory frameworks and, typically, use permissioned blockchains. In these materials, we refer to such assets as “tokenized assets” and we believe that they should not be within the scope of SAB 121 at all. By contrast, native crypto-assets (e.g., Bitcoin and Ether) typically use permissionless blockchains. We refer to such assets as “crypto-assets”.
These crypto-assets should be the proper focus of SAB 121 because they may, with respect to non-prudentially regulated entities, raise the risks identified in the SAB. We believe, however,
that these technological, legal and regulatory risks are substantially mitigated by banking organizations and their federal supervisors, given existing regulation, supervision, legal precedent and related industry practices.

1 More information about the Associations is available in Appendix A.