Executive Office of US Vice President Joe Biden announced its stance on proposed legislation, H.J. Res. 109, that would allow highly regulated financial Companies that will act as custodians to Bitcoin and other cryptocurrency.
JUST IN: 🇺🇸 US President Joe Biden Administration says Biden would veto legislation that would allow highly regulated financial Companies to be entrusted with custody #Bitcoin The crypto. pic.twitter.com/aXx8aq1m0Z
— Bitcoin Magazine (@BitcoinMagazine) May 8, 2024
“The Administration strongly opposes passage of H.J. Res. 109, which would disrupt the Securities and Exchange Commission’s (SEC) work to protect investors in crypto-asset markets and to safeguard the broader financial system,” The Executive Office of The President has stated. “If the President were presented with H.J. Res. 109, he would veto it.”
H.J.Res. 109 would overturn the SEC’s Staff Accounting Bulletin (SAB) No. 121, which imposes restrictions on financial institutions regarding the custody of digital assets, under the Congressional Review Act (CRA). This bipartisan resolution, by overturning SAB121, would remove the roadblocks that prohibit highly regulated financial It is illegal for institutions to act as custodians or digital assets.
US Representative Patrick McHenry is the Chairman of House Financial Services Committee. expressed support SAB 121 of the SEC, stating that, “Staff Accounting Bulletin, or SAB, 121 is one of the most glaring examples of the regulatory overreach that has defined Gary Gensler’s tenure at the SEC. Through SAB 121, the Commission is trying to dictate how financial institutions and firms safeguard Americans’ digital assets under the guise of so-called staff guidance.”
#WATCH: Chairman @PatrickMcHenry Delivers remarks in support H.J.Res. Nullify SAB121 with 109
"This bipartisan resolution is an essential effort to protect consumers and foster innovation in digital asset markets."
Continue reading🔗https://t.co/jnIBJFHIPj
📺 Watch👇 pic.twitter.com/fOxOh8DtWH
— Financial Services GOP (@FinancialCmte) May 8, 2024
“SAB 121 requires financial institutions and firms that are safeguarding their customers’ digital assets to hold those assets on their balance sheet,” McHenry, continued. “That means banks would be required to take on significant capital, liquidity, and other costs under the existing prudential regulatory framework. This essentially makes it cost prohibitive for financial institutions to custody their customers’ digital assets. This is a massive deviation from how highly regulated banks are traditionally required to treat the assets they hold on behalf of their customers.”
US Congressman French Hill also spoke out in support for H.J. Res. “Res. “Holding reserves against the assets held in custody is NOT standard financial services practice. The Biden Admin’s SAB 121 is misguided and should be nullified.”
It is not standard to hold reserves on assets in custody financial services practice.
The Biden Admin's SAB 121 is misguided and should be nullified. The thank you @USRepMikeFlood His excellent work in leading a CRA resolution to roll back the SEC's failure in their… pic.twitter.com/jwaTYWxhXs
— French Hill (@RepFrenchHill) May 8, 2024
“Discouraged that President Biden issued a Statement of Administration Policy saying he would veto H.J. Res 109, the Joint Resolution to nullify the SEC’s Staff Accounting Bulletin (SAB) 121,” said Cody Carbone, Chief Policy Officer at The Chamber of Digital Commerce, an American advocacy group that promotes the Bitcoin industry in DC. “SAB 121 effectively prohibits trusted custodians from being able to manage digital assets.”
Earlier this year, Congressmen Mike Flood and Wiley Nickel co-authored A bipartisan opinion piece on the SEC “flawed SAB 121 guidance,” Declaring that “When it comes to digital asset custody, it’s clear our most regulated institutions need to be at the table,” The lack of custody options for Bitcoin spot ETFs could create concentration risks.
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Source: bitcoinmagazine.com