Is Crypto Safe with Banks? Senate Says Yes, But Biden’s Veto Looms

In a surprise move shaking up the world of cryptocurrency, the Senate just passed a bill with bipartisan support aimed at overturning the SEC’s Staff Accounting Bulletin (SAB) No. 121! This bill, H.J. Res. 109, could allow banks to hold your Bitcoin and other digital assets. But there’s a twist: President Biden might veto it. Will crypto go mainstream with Wall Street’s help?

Read on to find out the latest and what it means for you.

Targeting SEC Restrictions

H.J. Res. 109 seeks to nullify the SEC’s SAB 121, which prevents financial institutions from acting as custodians for digital assets like Bitcoin. The Senate approved the resolution with a 60 to 38 vote, reflecting the broad bipartisan support it received in the House.

The bill, under the Congressional Review Act, aims to remove what proponents see as unnecessary barriers, allowing regulated financial firms to offer cryptocurrency custody services.

White House Opposition

However, the White House has clearly stated its opposition to the legislation. 

A recent statement from the administration threatened the Bill with the potential use of the President’s veto power if it reaches Biden’s desk. The main contention of the White House is that overturning SAB 121 would “disrupt the SEC’s work to protect investors in crypto-asset markets and to safeguard the broader financial system.”

Opposition Speaks – Warren at the Forefront

Senator Elizabeth Warren has been a vocal opponent of the bill, urging the Senate to reject it. She highlighted the unique risks associated with cryptocurrencies, such as hacking and fraud, citing incidents involving Binance and FTX as examples.

Proponents of H.J. Res. 109 argue that removing SAB 121 is crucial for consumer protection in the U.S. They claim that the current custody practices contribute to centralization risks, with a few institutions holding most of the Bitcoins.

Proponents’ Perspective

Senator Cynthia Lummis, a major supporter of the bill, criticized SAB 121 as being imposed without proper procedure. She stated,

“SAB 121 is a rule under the Administrative Procedure Act, disguised as accounting guidance. The SEC staff published it without the approval of the majority of the commission.”

If SAB 121 is overturned, more regulated institutions could hold Bitcoin on behalf of customers. Critics believe these institutions are well-equipped to manage digital asset custody due to their compliance frameworks and security protocols.

Understanding the Next Steps

Fox Business journalist Eleanor Terrett spoke out on X.

However, President Biden has already indicated his intention to veto H.J. Res. 109. With Senator Warren’s strong opposition and alignment with SEC Chair Gary Gensler, it seems likely that Biden will follow through with his veto.

If the veto occurs, the resolution’s progress will be halted, maintaining the current restrictions on financial institutions’ custody of digital assets. Additionally, a “pocket veto” could occur if Congress adjourns during the 10-day period, preventing the bill from becoming law without an explicit veto.

As the debate continues, the future of cryptocurrency custody regulations hangs in the balance, awaiting the President’s decision.

Also Check Out: USA Elections: A Detailed Look at Biden’s Crypto Policies in 2024

Cryptocurrency in the hands of Wall Street: Boon or Bane? We want to hear from you!