As a long-time crypto investor with a deep understanding of the industry, I am excited about the recent developments regarding crypto custody services in the US. The Senate’s vote to scrap the SAB 121 de facto ban is a significant step forward for the space. However, I remain cautiously optimistic as President Biden has promised to veto the resolution.
On Tuesday, the United States Senate adopted a resolution, effectively lifting an unofficial prohibition that had barred American banks from providing cryptocurrency custody solutions.
As a researcher studying the cryptocurrency market, I’ve noticed that the recent vote on Bitcoin-related matters elicited cautiously optimistic reactions from its ardent advocates both in the online community and in Congress. However, we remain apprehensive given the likelihood of a veto from the presidential office.
Will Crypto Banking Be Possible In The US?
I analyzed the situation and can confirm that, as of Thursday afternoon, H.J.Res.109 represents Congress’s disapproval of Staff Accounting Bulletin 121 (SAB 121), a rule issued by the Securities and Exchange Commission (SEC) two years prior.
As a financial analyst, I would rephrase it this way: I. The bulletin is designed for publicly-traded banks. II. Its purpose is to offer accounting direction. III. This guidance pertains to banks offering services to secure the digital assets of their clients in the cryptocurrency market.
Detractors of SAB 121 label it as a disguised “rule masking as guidance,” making it financially burdensome and infeasible for providing related services. Representative Tom Emmer (R-Minn) criticized this bulletin as one of SEC chair Gensler’s “excessive efforts to broaden the SEC’s jurisdiction” and evidence of his “obvious bias towards the digital asset sector.”
Last week, the House of Representatives approved a resolution with the support of 55 percent of its members. Conversely, on Thursday, the Senate’s vote resulted in a more significant disparity, with 60% of votes cast in favor and 38% against. All Republicans backed this measure, while 11 Democrats joined them in approval.
Getting Past Biden
The House and Senate failed to secure sufficient votes to override a veto from President Joe Biden, who has previously indicated his intention to exercise this power should the issue reach him.
As a researcher studying recent political developments, I’ve come across an intriguing turn of events. Thursday’s unexpected outcome has left some hopeful that the administration may reconsider its stance on this particular issue. Notably, high-profile senators like Democratic caucus leader Chuck Schumer (D-NY) have broken ranks and voted against their party line.
“Custodia Bank CEO Caitlin Long stated on Twitter Thursday that the SEC’s crackdown on cryptocurrencies over the past year will have a more significant influence on the actions of regulatory agencies.”
“People inside these agencies who strongly dislike their tasks find encouragement to resist more vigorously with Warren’s actions. Warren may attempt to enforce stricter measures, but her influence might be waning.”
Elizabeth Warren advocated for SAB 121 and the Securities and Exchange Commission (SEC) during a presentation on Thursday. She contended that the SEC’s bulletin only recommends that financial institutions give clear warnings about potential risks associated with cryptocurrency custody.
For the first time in history, Congress has passed legislation specifically focused on cryptocurrencies through its two houses.
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2024-05-17 02:24