Regulation
Biden opposes Congress on crypto, a divisive veto!
7:00 a.m. ▪ 3 min reading ▪ by Fénelon L.
US President Joe Biden has vetoed a congressional resolution to invalidate the Securities and Exchange Commission’s (SEC) controversial Staff Accounting Bulletin 121 (SAB121). This unexpected decision revives the debate on the regulation of cryptocurrencies and its impact on financial institutions.
SAB121: A controversial directive at the heart of the debate
Published by the SEC in March 2022, the SAB121 requires banks and other entities holding crypto assets on behalf of their clients to record them as liabilities on their balance sheets.
Upon its publication, this directive sparked strong opposition from the crypto industry and banking sector, who believe it imposes exorbitant compliance costs, thereby hindering the offering of asset-related services digital.
In response, members of Congress from both parties introduced a resolution to repeal SAB121. On May 9, 2024, 11 Democratic senators supported this resolution and the House of Representatives passed it by a vote of 228 to 182.
However, the president Biden vetoed this resolution, citing in its statement the need to effectively protect consumers and investors while preserving the benefits of crypto innovation.
Critics of SAB121 from both parties in Congress say the measure, still in effect today, restricts Americans’ ability to keep their crypto assets in traditional banks.
Towards a global regulatory framework
Biden’s veto does not end the debate on crypto regulation. The administration has said it is ready to work with Congress to develop a comprehensive and balanced regulatory framework for digital assets.
Lawmakers like Rep. Mike Flood, disappointed by the president’s decision, emphasize the crucial role of cryptos in the financial future of the United States. They call on banks, as trusted custodians, to work hand in hand with regulators to offer services tailored to digital assets, similar to those offered for other asset classes.
As the debate continues, it becomes clear that striking the right balance between promoting innovation and protecting investors will be essential. The crypto industryRegulators and legislators will need to join forces to shape a regulatory environment conducive to responsible and sustainable growth of this ever-evolving sector.
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Fenelon L.
Passionate about Bitcoin, I like to explore the intricacies of blockchain and cryptos and I share my discoveries with the community. My dream is to live in a world where privacy and financial freedom are guaranteed for everyone, and I firmly believe that Bitcoin is the tool that can make this possible.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.