Executive Office of US President Joe Biden Announce Its position on the proposed legislation, HJ Res. 109, would allow highly regulated financial companies to act as custodians for bitcoin and other cryptocurrencies.
JUST IN: 🇺🇸 US President Joe Biden's administration says Biden will veto legislation that would allow highly regulated financial companies to incubate #Bitcoin And encryption. pic.twitter.com/aXx8aq1m0Z
– Bitcoin Magazine (@BitcoinMagazine) May 8, 2024
“The Administration strongly opposes passage of HJ Res. 109, which would disrupt the SEC’s work to protect investors in crypto-asset markets and protect the broader financial system,” the Executive Office of the President stated. “If the President is presented with HJ Res. 109, he will veto it.”
HJRes. Act 109 would repeal SEC Staff Accounting Bulletin (SAB) 121, which imposes restrictions on financial institutions regarding the custody of digital assets, under the Congressional Review Act (CRA). By repealing SAB 121, this bipartisan resolution would remove barriers that prevent highly regulated financial institutions and companies from serving as custodians of Bitcoin and digital assets.
US Congressman Patrick McHenry, Chairman of the House Financial Services Committee, He expressed his support To repeal the SEC's SAB 121, stating that “Staff Accounting Bulletin, or SAB, 121 is one of the most blatant examples of regulatory overreach that has defined Gary Gensler's tenure at the SEC. Through SAB 121, the SEC is trying to Dictating how financial institutions and companies protect Americans' digital assets under the guise of so-called employee directives.
#He watches: president @Patrick McHenry Provides feedback in support of HJRes. 109 for Saab Champions 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 Republican Party (@FinancialCmte) May 8, 2024
McHenry continued: “SAB 121 requires financial institutions and companies that protect their customers’ digital assets to hold these assets on their balance sheets. This means that banks will be required to bear a significant amount of capital, liquidity and other costs under the current system. This makes a prudential regulatory framework prohibitive.” For financial institutions to hold their customers' digital assets, this is a major departure from the traditional way highly regulated banks are required to handle the assets they hold on behalf of their customers.
US Congressman French Hill also spoke in support of HJ Res. 109, saying that “holding reserves against held assets is not standard practice for financial services. The Biden administration's SAB 121 is misleading and should be rescinded.”
Maintaining reserves against held assets is not standard practice for financial services.
The Biden administration's SAB 121 is misleading and should be repealed. I thank @USRepMikeFlood For his excellent work in leading the CRA's decision to reverse the SEC's failure to… pic.twitter.com/jwaTYWxhXs
– French Hill (@RepFrenchHill) May 8, 2024
“I am disappointed that President Biden issued an Administration policy statement saying he will veto HJ Res 109, the joint resolution to invalidate SEC Staff Accounting Bulletin (SAB) 121.” He said Cody Carbone, chief policy officer at the Chamber of Digital Commerce, a US advocacy group that promotes the Bitcoin industry in DC. “SAB 121 effectively prevents trusted custodians from being able to manage digital assets.”
Earlier this year, Congressmen Mike Flood and Willie Nickel Co-authored A bipartisan opinion piece on the SEC's “flawed SAB 121 guidance” states that “when it comes to custody of digital assets, it is clear that our most regulated institutions should be at the table,” expressing concern about the lack of… Custody options for spot assets Bitcoin ETFs, which may result in concentration risk.
Update: HJ Res 109 was officially approved in the House by a vote of 228-182, and now moves to the Senate.
BREAKING: 🇺🇸 Legislation that would repeal an SEC rule preventing highly regulated financial firms from custody #Bitcoin And cryptocurrencies pass through the house. pic.twitter.com/XRKt84ML0M
– Bitcoin Magazine (@BitcoinMagazine) May 8, 2024