First-Ever Standalone Crypto Legislation By The U.S.

President Joe Biden To Veto US Congress Standalone Crypto Legislation

What’s The News

In a historic move, the U.S. Congress enacted its first piece of standalone cryptocurrency legislation last week. The contentious Staff Accounting Bulletin No. 121 (SAB 121) of the U.S. Securities and Exchange Commission (SEC) intended to be overturned by the bill. This law represents a critical turning point in the regulation of cryptocurrencies and suggests future adjustments to the way financial institutions manage digital assets. However, President Joe Biden has warned that he will veto this due to concerns about financial system stability and market volatility.

The SAB 121 of U.S. SEC Rule

According to SAB 121, companies that retain cryptocurrency assets for users must record them on their balance sheets as liabilities and the accompanying assets at fair value. This legislation has drawn criticism for placing banks and other financial institutions under excessive financial strain. This could discourage them from providing custody services for cryptocurrency assets. SAB 121 which House Financial Services Committee Chair Patrick McHenry (R-NC) described as an example of SEC Chair Gary Gensler's regulatory overreach renders it prohibitively expensive for financial institutions to protect the digital assets of their consumers.

Senator Cynthia Lummis (R-WY) of the United States praised the Senate for passing the Congressional Review Act (CRA) to repeal SAB 121, describing it as a win for financial innovation and a scathing critique of the Biden administration's approach to regulating cryptocurrencies. Congress can examine and even repeal regulations produced by federal agencies thanks to the CRA. Earlier this month, the U.S. House of Representatives voted to reverse SAB 121 and last week, the Senate approved the measure. 

President Joe Biden On Crypto Regulation

President Joe Biden strongly opposed Congress’s decision to overturn SAB 121. A White House statement claims that restricting the SEC's capacity to uphold an extensive and successful financial regulatory framework for cryptocurrency assets might significantly increase market volatility and financial instability. This position demonstrates the administration's worries about the possible consequences of relaxing crypto restrictions.

Conclusion

As per CoinGabbar, With the ongoing debate on cryptocurrency regulation across the United States, it is notable that the U.S. Congress adopted the first stand-alone crypto bill. Critics argue that such a law would pose a threat to financial security and exchange market integrity while advocates consider it as a way to facilitate financial development and limit the power of regulators. The future of cryptocurrency regulation in the United States is still a hotly debated and closely monitored topic as the legislative process moves forward. 

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