US House Of Representatives Approve New Bill Only For Joe Biden To Reject It

The bill previously passed by the United States House of Representatives overturns contentious guidance by the United States Securities and Exchange Commission (SEC) that restricts ownership of cryptocurrencies within banks.

President Joe Biden, however, has now announced that he would veto the new legislation if it reached his desk. This statement has reaffirmed the commonly held belief that the White House does not actually act on behalf of the American public and their interests. Interestingly enough, former President Donald Trump has pledged full support for cryptocurrencies if he is reelected.

Fighting Back Against The SEC

On May 8th, the House approved a bipartisan bill known as H.J. Res 109, which nullifies the SEC Special Accounting Bulletin (SAB 121). This bulletin mandates banks to include the crypto assets of their customers on their balance sheets, unlike traditional assets such as securities.

Republican Congressman Mike Flood, who introduced the resolution, argued that SAB 121 unfairly burdens banks seeking to custody crypto, as custodial assets are typically not included on balance sheets. Notably, 21 Democrats supported the bill, joining the unanimous 207 Republican votes, resulting in the bill being passed with 228 votes in favor and 182 against.

An Outrageous Overreach

The White House expressed strong opposition to efforts by House members to overturn SAB 121, asserting that it would disrupt the SEC and its mission to safeguard investors in crypto-asset markets and the broader financial system. Restricting the SEC and their ability to maintain a comprehensive and effective regulatory framework for crypto-assets could introduce significant financial instability and market uncertainty.

Introduced by the SEC in March 2022, SAB 121 outlines local accounting guidelines for institutions intending to custody crypto assets. Notably, SAB 121 effectively prohibits banks when it comes to serving as custodians of crypto assets on behalf of clients.

US lawmakers, including SEC Commissioner Hester Peirce, have argued that SAB 121 undermines the willingness of regulated banks to act as crypto custodians and treats crypto holdings differently compared to other assets.