The Senate has just made a groundbreaking decision by passing legislation that would overturn the SEC’s rule preventing highly regulated financial firms from custodying Bitcoin and other cryptocurrencies. The bipartisan support for the measure was evident with a vote of 60 to 38 in favor of the resolution, known as H.J.Res. 109.
This legislation aims to dismantle SAB 121, a rule that imposes strict restrictions on financial institutions, hindering them from offering custody services for digital assets like Bitcoin. Proponents argue that overturning this rule is essential for protecting consumers in the United States, especially in light of the recent approval of spot Bitcoin Exchange Traded Funds (ETFs) by the SEC.
However, the White House has made it clear that President Biden will veto the bill if it reaches his desk. The administration believes that overturning SAB 121 would disrupt the SEC’s efforts to protect investors in the crypto-asset markets and safeguard the financial system.
Senator Cynthia Lummis, a vocal advocate for Bitcoin, supported the legislation, emphasizing the need to remove barriers for regulated institutions to custody Bitcoin on behalf of customers. On the other hand, Senator Elizabeth Warren urged the Senate to vote against the legislation, citing concerns about the security risks associated with digital assets.
The future of H.J.Res. 109 remains uncertain due to the potential presidential veto. If President Biden follows through with his promise, the resolution’s progress would be halted, maintaining the current status quo. The decision now lies in Biden’s hands, as he has the options to sign the bill into law, veto it, or take no action.
Overall, the Senate’s decision to pass this legislation marks a significant development in the regulation of digital assets and financial institutions. The debate surrounding the custody of Bitcoin and cryptocurrencies continues to be a hot topic, with stakeholders on both sides advocating for their positions.
