The crypto Industry Is Popping Champagne (Or Maybe Uncorking Their Digital Wallets) After bitcoin-but-what-about-joe-biden” target=”_blank” rel=”noopener nofollow”>a surprise victory in the United States Senate. On Thursday, the upper house voted 60-38 to repeal a controversial rule introduced by the Securities and Exchange Commission (SEC) known as SAB 121.
Regulators back down
The defeated rule would have forced banks that held digital assets for clients to classify them as liabilities on their balance sheets. This, according to the Chamber of Digital Commerce, the main blockchain trade association, would have effectively closed the door to banks offering bitcoin” target=”_blank” rel=”noopener nofollow”>bitcoin custody services.
Industry experts argued that SAB 121 lacked economic justification and primarily served to stifle innovation by limiting access to secure storage solutions for digital currency investors.
Austin Campbell, founder of Zero Knowledge Consulting, went further and suggested that the rule “benefits unregulated custodians,” potentially leaving cryptocurrency holders exposed.
A bipartisan surprise: Democrats join the crypto chorus
The Senate vote was not simply a victory for the crypto industry; It was a surprising display of bipartisan cooperation. Up to 12 Democrats defied party lines and voted alongside Republicans to repeal the rule.
This unexpected alliance reflects the growing widespread recognition of cryptocurrency, reinforced by bitcoin's recent achievement of obtaining a spot exchange-traded fund (ETF) earlier this year.
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Wall Street wants bitcoin, the House of Representatives wants bitcoin and now the Senate wants twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>#bitcoin. pic.twitter.com/lLqBv2XZJy
—Michael Saylor (@saylor) twitter.com/saylor/status/1791150877891252260?ref_src=twsrc%5Etfw” rel=”nofollow noopener” target=”_blank”>May 16, 2024
Michael Saylor, a strong bitcoin advocate and co-founder of MicroStrategy, which owns a huge bitcoin treasury, took to social media to celebrate, declaring: “Wall Street wants bitcoin, the House of Representatives wants bitcoin, and now the Senate wants bitcoin. “
The final hurdle: Can cryptocurrencies overcome the veto?
While the Senate vote is a significant victory, the champagne corks may need to be postponed for now. US President Joe Biden previously expressed his support for the SEC's approach to regulating cryptocurrencies, and the White House has indicated he could veto the resolution.
This throws the future of the repealed rule into uncertainty. Industry players are cautiously optimistic, with Compound Labs' Robert Leshner calling this the “first of many” legislative victories for cryptocurrencies. However, the specter of a veto looms large, reminding everyone that the battle for widespread acceptance of cryptocurrencies is far from over.
The cryptocurrency industry is clearly gaining traction in Washington, but the path to full regulatory clarity remains bumpy. With a possible veto on the horizon, the coming weeks will be crucial in determining whether this Senate victory translates into lasting progress for cryptocurrencies in the United States.
Featured image from Getty Images, chart from TradingView
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