This resolution aims to enable highly regulated financial firms to serve as custodians for Bitcoin and other digital assets.
It seeks to achieve this by overturning the SEC’s Staff Accounting Bulletin (SAB) No. 121. Let’s explore more about this important measure to let banks custody crypto.
Proposed Bill to Allow Banks to Custody Cryptocurrencies
Introduced under the Congressional Review Act (CRA), H.J. Res. 109 directly challenges SAB 121. This regulation currently imposes strict limitations on the ability of financial institutions to hold digital assets.
The SEC introduced SAB 121 to safeguard the financial system and investors from potential risks associated with the custody of digital currencies. These currencies are known for their volatility and security concerns.
JUST IN: US President Joe Biden Administration says Biden would veto legislation that would allow highly regulated financial firms to custody #Bitcoin and crypto. pic.twitter.com/aXx8aq1m0Z
— Bitcoin Magazine (@BitcoinMagazine) May 8, 2024
The bipartisan resolution, if passed, would remove these existing roadblocks. This change would allow banks and other financial entities, already under stringent regulatory scrutiny, to serve as custodians for cryptocurrencies. This move could catalyze the mainstream acceptance and integration of cryptocurrencies into the traditional financial system.
US Congressman Patrick McHenry, Chairman of the House Financial Services Committee, expressed support for overturning the SEC’s SAB 121, stating, “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 of H.J.Res. 109 to nullify SAB 121:
"This bipartisan resolution is an essential effort to protect consumers and foster innovation in digital asset markets."
Read more
https://t.co/jnIBJFHIPj
Watch
pic.twitter.com/fOxOh8DtWH
— Financial Services GOP (@FinancialCmte) May 8, 2024
On the other hand, US Congressman French Hill also spoke out in support of H.J. Res. 109, saying that “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.”
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. I thank @USRepMikeFlood for 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
Disclaimer
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