The Executive Office of US President Joe Biden has Announced his stance on proposed legislation, HJ Res. 109, which would allow highly regulated financial firms to act as custodians of bitcoin and other cryptocurrencies.
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JUST IN: US President Joe Biden's administration says Biden would veto legislation that would allow highly regulated financial firms to custody twitter.com/hashtag/bitcoin?src=hash&ref_src=twsrc%5Etfw”>#bitcoin and cryptography. pic.twitter.com/aXx8aq1m0Z
– bitcoin Magazine (@BitcoinMagazine) twitter.com/BitcoinMagazine/status/1788274505753755836?ref_src=twsrc%5Etfw”>May 8, 2024
“The Administration strongly opposes the approval of HJ Res. 109, which would disrupt the work of the Securities and Exchange Commission (SEC) to protect investors in the cryptoasset markets and safeguard the financial system in general,” he stated. the Executive Office of the President. “If HJ Res. 109 is presented to the President, he will veto it.”
HJRes. 109 would repeal SEC Staff Accounting Bulletin (SAB) No. 121, which imposes restrictions on financial institutions with respect to the custody of digital assets, under the Congressional Review Act (CRA). By repealing SAB 121, this bipartisan resolution would remove obstacles that prevent highly regulated financial institutions and companies from acting as custodians of bitcoin and digital assets.
US Congressman Patrick McHenry, Chairman of the House Financial Services Committee, expressed his support for repealing the SEC's SAB 121, stating: “Staff Accounting Bulletin, or SAB, 121 is one of the most glaring examples of the regulatory overreach that has defined Gary Gensler's tenure at the SEC. Through SAB 121, the Commission is attempting to dictate how financial institutions and companies safeguard Americans' digital assets under the guise of so-called staff guidance.”
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twitter.com/hashtag/WATCH?src=hash&ref_src=twsrc%5Etfw”>#LOOK: President twitter.com/PatrickMcHenry?ref_src=twsrc%5Etfw”>@PatrickMcHenry delivers comments in support of HJRes. 109 to annul SAB 121:
"This bipartisan resolution is an essential effort to protect consumers and encourage innovation in digital asset markets."
Read more https://t.co/jnIBJFHIPj
Look pic.twitter.com/fOxOh8DtWH
— Republican Financial Services Party (@FinancialCmte) twitter.com/FinancialCmte/status/1788250258885038239?ref_src=twsrc%5Etfw”>May 8, 2024
“SAB 121 requires financial institutions and businesses that protect their customers' digital assets to keep those assets on their balance sheet,” McHenry continued. “That means banks would have to bear significant capital, liquidity and other costs under the current one.” This essentially makes it prohibitive for financial institutions to custody their customers' digital assets. “This is a huge departure from how highly regulated banks traditionally must treat the assets they hold on behalf of their clients.”
US Congressman French Hill also spoke out in support of HJ Res. 109, which says that “Maintaining reserves against assets held in escrow is NOT standard financial services practice. The Biden admin's SAB 121 is wrong and should be repealed “.
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Maintaining reserves against assets held in custody is NOT standard financial services practice.
The Biden administration's SAB 121 is wrong and should be repealed. I appreciate twitter.com/USRepMikeFlood?ref_src=twsrc%5Etfw”>@USRepMikeFlood for his excellent work in leading a CRA resolution to reverse the SEC's failure in its… pic.twitter.com/jwaTYWxhXs
– French Hill (@RepFrenchHill) twitter.com/RepFrenchHill/status/1788260900782182826?ref_src=twsrc%5Etfw”>May 8, 2024
“Discouraged that President Biden issued an Administrative Policy Statement saying he would veto HJ Res 109, the Joint Resolution to Repeal SEC Staff Accounting Bulletin (SAB) 121,” x.com/CodyCarboneDC/status/1788263944034934964″>saying Cody Carbone, policy director at the Chamber of Digital Commerce, an American advocacy group promoting the bitcoin industry in DC. “SAB 121 effectively prohibits trusted custodians from managing digital assets.”
Earlier this year, Congressmen Mike Flood and Wiley Nickel bitcoin-etf-investors-opinion-1873541″>co-author a bipartisan op-ed on the SEC's “flawed SAB 121 guidance,” stating that “when it comes to digital asset custody, it's clear that our most regulated institutions need to be at the table,” expressing concern about the lack of custodian options for bitcoin ETF spot assets, which could give rise to concentration risks.
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