What Will Happen in 10 Days as Senate Approves Crypto Custody Bill, Despite Potential Veto Threat from President Biden?
The H.J. Res 109 Bill was finally passed by the Senate today, aiming to overturn the SEC’s Staff Accounting Bulletin (SAB) No. 121. Despite bipartisan support for the Bill, there is a possibility that President Biden will veto it.
The Senate approved the resolution, H.J. Res. 109, which seeks to eliminate the SEC’s SAB 121 that restricts financial institutions from acting as custodians for digital assets like Bitcoin. The resolution received a 60 to 38 vote in the Senate and was passed by the House with significant bipartisan support.
Under the Congressional Review Act, H.J. Res. 109 aims to remove the barriers imposed by the SEC’s SAB 121, allowing regulated financial firms to offer cryptocurrency custody services.
However, the White House has expressed its opposition to the legislation. A recent statement from the administration warned that President Biden may use his veto power if the Bill reaches his desk. The White House’s main concern is that overturning SAB 121 would disrupt the SEC’s efforts to protect investors in the crypto-asset markets and safeguard the broader financial system.
As expected, Senator Elizabeth Warren strongly opposed the resolution and urged the Senate to reject it. She argued that digital assets are a fundamentally different asset class with unique risks, including the potential for hacking, as demonstrated by incidents like Binance and FTX fraud.
In response, proponents of H.J. Res. 109 argue that overturning SAB 121 is necessary for consumer protection in the United States. They believe that a few institutions currently hold the majority of Bitcoins due to the centralized custody practices. Overturning SAB 121 would allow more regulated institutions to hold Bitcoin on behalf of customers. Supporters of the resolution argue that financial institutions are well-equipped to handle digital asset custody, given their compliance frameworks and security protocols.
President Biden now has 10 days to either veto, sign, or take no action on the resolution. If he takes no action, it will become law without his signature. However, he has already stated his intention to veto the Bill. It remains to be seen if his vocal support of crypto in the past week will influence his decision.
If the veto is cast, the resolution’s progress will be halted, and the current restrictions on financial institutions’ custody of digital assets will remain in place. There is also a possibility of a “pocket veto” if Congress adjourns during the 10-day period.
For more information on Biden’s crypto policies in 2024, you can check out the detailed analysis of the USA Elections.