The Executive Office of United States President Joe Biden has actually revealed its position on proposed legislation, H.J. Res. 109, that would enable extremely managed financial firms to function as custodians for Bitcoin and other cryptocurrencies.
SIMPLY IN: 🇺🇸 United States President Joe Biden Administration states Biden would veto legislation that would enable extremely managed financial firms to custody #Bitcoin and 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 specified. “If the President were presented with H.J. Res. 109, he would veto it.”
H.J.Res. 109 would reverse the SEC’s Staff Accounting Bulletin (SAB) No. 121, which enforces constraints on banks concerning the custody of digital possessions, under the Congressional Review Act (CRA). By reversing SAB 121, this bipartisan resolution would eliminate obstructions that avoid extremely managed banks and firms from functioning as custodians for Bitcoin and digital possessions.
United States Congressman Patrick McHenry, Chairman of the House Financial Services Committee, revealed assistance for reversing the SEC’s SAB 121, mentioning, “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 provides remarks in assistance 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
“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.”
United States Congressman French Hill also spoke up in assistance for H.J. Res. 109, stating that “Holding reserves versus the possessions held in custody is NOT basic financial services practice. The Biden Admin’s SAB 121 is misdirected and ought to 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
“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,” stated Cody Carbone, Chief Policy Officer at The Chamber of Digital Commerce, an American advocacy group that promotes the Bitcoin market 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 op-ed on the SEC’s “flawed SAB 121 guidance,” mentioning that “When it comes to digital asset custody, it’s clear our most regulated institutions need to be at the table,” revealing issue about the absence of custodian choices for area Bitcoin ETFs, which might lead to concentration dangers.
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