The United States House of Representatives has approved a bill aimed at overturning the Securities and Exchange Commission's (SEC) guidance that bars banks from holding cryptocurrencies. The bill, known as H.J. Res 109, received bipartisan support.
Republican Congressman Mike Flood, who introduced the resolution, criticized the SEC's Special Accounting Bulletin (SAB 121), arguing that it unfairly burdens banks by requiring them to include customers' crypto assets on their balance sheets, unlike traditional securities.
Despite 21 Democrats joining Republicans in voting for the bill, totaling 228 votes in favor and 182 against, President Joe Biden has signaled his intention to veto it. The White House issued a statement expressing strong opposition to the bill, citing concerns about disrupting the SEC's investor protection efforts and destabilizing the financial system.
In a May 8 statement, the White House said it “strongly opposes” members of the House of Representatives looking to overturn SAB 121, claiming it would disrupt the SEC’s efforts “to protect investors in crypto-asset markets and to safeguard the broader financial system.”
Limiting the SEC’s ability to maintain a comprehensive and effective financial regulatory framework for crypto-assets would introduce substantial financial instability and market uncertainty.
Source:White House
SAB 121, introduced by the SEC in March 2022, lays out accounting guidelines for institutions handling crypto assets, effectively discouraging banks from offering custody services for cryptocurrencies.
Critics, including SEC Commissioner Hester Peirce, argue that SAB 121 undermines the role of regulated banks as custodians of digital assets and creates unequal treatment for crypto holdings compared to traditional assets.
The House Financial Services Committee (HSFC) defended the bill, stating that overturning SAB 121 would ensure consumer protection by removing barriers for regulated financial institutions to offer crypto custody services.
HSFC Chairman Patrick McHenry criticized SAB 121 as an example of regulatory overreach under SEC Chairman Gary Gensler's leadership.
The U.S. Senate joined the House of Representatives in voting to repeal a controversial Securities and Exchange Commission (SEC) accounting rule that imposed onerous capital requirements on crypto custodians.
JinseFinanceSenate's bipartisan approval of H.J.Res. 109 challenges SEC's SAB 121, pushing President Biden to decide amidst political and industry pressures.
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