Senate Passes Bill To Scrap Anti-Crypto Banking Policy

The US Senate passed a resolution on Tuesday to overturn a de facto ban preventing banks in the country from offering cryptocurrency custody services.

The vote sparked cautious optimism from Bitcoin's most ardent supporters online and in Congress, who remain wary of the possibility of a presidential office veto.

Will crypto banking be possible in the US?

As voted on Thursday afternoon, HJRes.109 certifies Congress' disapproval of Staff Accounting Bulletin No. 121 (SAB 121), which the SEC published two years ago.

The bulletin provides accounting guidance for publicly traded banks that aim to provide services that safeguard crypto assets for their clients.

Critics of SAB 121 call it a “rule” disguised only as “guidance,” which makes providing such services extremely expensive and impractical. For example, Rep. Tom Emmer (R-MN) Named One bulletin about SEC Chairman Gensler's “outrageous attempts to expand the SEC's authority,” and a reference to his “apparent bias toward the digital assets ecosystem.”

The decision was approved by the House of Representatives last week with a majority of 55% of the votes. Thursday's Senate vote was more split 60/38, with all Republicans voting in favor along with 11 Democrats.

Bypass Biden

However, House and Senate votes fell short of strong enough majorities to override the veto — something President Joe Biden has already promised to do if it reaches his desk.

However, some are optimistic that Thursday's result may make the administration change its mind. Several influential senators broke across party lines on the vote, such as Democratic caucus leader Chuck Schumer (D-N.Y.).

“The biggest impact of this vote is on the behavior of agencies.” chirp Custodia Bank CEO Caitlin Long said Thursday, referring to the SEC's anti-crypto enforcement actions over the past year.

“This gives people within agencies who hate what they are doing the political support to fight back forcefully,” Long continued. “She (Elizabeth Warren) will probably try to take more drastic measures, but she is past her peak.”

Elizabeth Warren Arguments presented on Thursday in support of SAB 121 and the Securities and Exchange Commission, claiming that the bulletin only advises banks to make reasonable disclosures about risks related to holding cryptocurrencies.

This resolution represents the first legislation focused purely on cryptocurrencies to have passed through both chambers of Congress.