Quick Take:
•President Joe Biden is ready to veto legislation that would let financial firms custody Bitcoin.
•The bill seeks to overturn SEC guidelines that currently restrict how financial institutions can handle digital assets.
Yello ParadiseSquad! In a move that’s stirred up more drama than a reality TV show finale, President Joe Biden’s office has whipped out the veto pen for a bill that’s trying to make life easier for financial firms wanting to handle Bitcoin and other cryptocurrencies. According to a tweet from Bitcoin Magazine dated May 8, 2024, the administration is not on board with H.J. Res. 109, which would let those well-behaved financial firms act as custodians for digital currencies.
Why So Serious, Mr. President?
The gist of Biden’s beef? He believes that passing H.J. Res. 109 would throw a wrench in the Securities and Exchange Commission’s (SEC) efforts to keep the crypto market safe from the wild west of digital desperados. The bill aims to overturn the SEC’s Staff Accounting Bulletin (SAB) No. 121, which currently makes financial institutions treat digital assets like a hot potato – something they have to hold very carefully, under specific conditions.
Congressmen Throw Down the Gauntlet
US Congressman Patrick McHenry, wielding the mighty gavel of the House Financial Services Committee, is championing this legislative push. He’s calling out the SEC’s SAB 121 as a prime example of regulatory overkill. According to McHenry, this rule forces banks to bear hefty costs if they want to keep their customers’ digital assets safe, turning what should be a straightforward service into a budget-busting ordeal.
A Rally for Change
Echoing McHenry, Congressman French Hill has also thrown his hat in the ring, arguing that the Biden Administration’s stance on holding reserves against assets in custody flies in the face of standard financial practice. Both are backing the bill as a crucial step toward protecting consumers and sparking innovation in the digital asset markets.
Digital Advocates Weigh In
Cody Carbone, Chief Policy Officer at The Chamber of Digital Commerce, is far from pleased with Biden’s veto threat. He sees SAB 121 as a regulatory misstep that stops trusted institutions from effectively managing digital assets. Earlier this year, Congressmen Mike Flood and Wiley Nickel penned a bipartisan op-ed slamming the SEC’s “flawed SAB 121 guidance,” highlighting the urgent need for our most regulated institutions to be key players in digital asset custody.
Crypto Custody Conundrum
As this political and regulatory saga unfolds, it’s clear that the battle lines are drawn. On one side, we have lawmakers and digital asset advocates pushing for a more flexible framework that would allow financial titans to safely extend their services to the burgeoning crypto market. On the other, President Biden and the SEC are holding the line, prioritizing investor protection and financial system safety.
Wrapping It Up
As the dust settles, it’s evident that the road to crypto regulation is anything but straightforward. With high stakes and high tensions, this tussle over how to handle digital dough continues to unfold, keeping market watchers on the edge of their seats. Stay tuned, as this regulatory roller coaster is far from over.
