As a seasoned crypto investor, I’m deeply disappointed by the recent turn of events regarding H.J. Res. 109 and the White House’s intention to veto it. The potential repeal of SAB 121, which has been described as a significant barrier for US banks in offering crypto custody services, could have paved the way for more institutional adoption and investment in digital assets.
A Republican initiative aimed at enabling American banks to offer cryptocurrency custody services has been blocked by the Democratic administration at the White House.
As a financial analyst, I can tell you that on Wednesday, I observed the House of Representatives deliberating over House Resolution 109 (H.J. Res. 109). This legislative proposal aimed to revoke previous accounting directives from regulators, which had advised banks intending to provide a certain service to their clients.
As a crypto investor, I was eagerly anticipating the outcome of the upcoming vote in the House and Senate. But just hours before it was set to begin, I received disappointing news from the Biden Administration. They made it clear that they intended to veto the resolution if it miraculously managed to pass through both houses of Congress.
A Major Blow To US Crypto Banking
According to the White House’s announcement, Staff Accounting Bulletin (SAB) 121, which Republicans aim to overturn, represents the perspectives of SEC staff concerning the accounting responsibilities of businesses handling customers’ cryptocurrencies.
The Office of the President stated that H.J. Res.109 could interfere with the SEC’s role in securing investor protection within crypto-asset markets and preserving the stability of the financial system at large. Should this resolution reach the President’s desk, he would exercise his veto power.
To become a law, most legislation requires approval from both the House and Senate with more than half of the votes from each chamber. Once this is achieved, the President has the power to approve or reject it. If the President vetoes the bill, then a two-thirds majority in both the House and Senate is necessary for the law to take effect despite the President’s objection.
On Wednesdays session, the House approved the resolution, yet it didn’t secure a majority with a 55% approval rating. Among those in favor were all Republican members numbering 207, joined by 26 Democratic representatives.
Understanding SAB 121
The bill’s advocate, Mike Flood of Nebraska, asserts that the Securities and Exchange Commission (SEC) overlooked consulting essential Federal banking agencies prior to releasing SAB 121, bypassing the customary rulemaking procedure.
I. In their assessment, they label the bulletin as concealed “directives” instead of “guidelines,” arguing that it imposes restrictive measures on banks seeking to offer genuine crypto custody solutions.
According to Financial Services Committee chairman Patrick McHenry’s statement in a Wednesday afternoon press release, SAB 121 mandates that financial institutions and firms keep their customers’ digital assets on their own balance sheets. This requirement is economically impracticable for them to implement.
“He went on to explain that this resolution enables consumers to securely store their digital assets in reputable and rigorously supervised financial establishments such as banks.”
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2024-05-09 02:22