- House to vote on overturning SEC’s crypto asset rule, facing a big challenge to secure a two-thirds majority.
- SEC’s SAB 121 mandates banks to list digital assets, sparking debate on financial stability and market integration.
- Industry experts skeptical of overturning Biden’s veto, citing vote shortfall and potential risks.
The United States House of Representatives prepares for the second vote on a bill that is planned to repeal the rule adopted by the Securities and Exchange Commission (SEC) that demands banks to reflect cryptocurrencies on their balance sheets.
This decision comes after the President of America Joe Biden vetoed the initial effort of passing the above resolution in May this year, after the resolution had received a nod from both the House and the Senate.
Background of SAB 121
The Staff Accounting Bulletin 121 (SAB 121) laid down by the SEC has made it mandatory for banks which are in the process of being listed to include cryptocurrencies in their balance sheets. Republican Mike Flood led the opposition of this rule whereby he asserted that it puts pressure on banks who want to custody cryptocurrency.
The first one was H. J. R. 109 that aimed at repealing SAB 121, but it has been voided by Biden on grounds of the possible financial instability and market uncertainty. House Majority Leader Steve Scalise says the chamber is eyeing the vote to be conducted as soon as next week.
The aim is to repeal the veto that President Biden has put in place and to do so a two-third majority of the members in the House and the Senate are needed. A supermajority vote of 75 percent is regarded as difficult in this case, bearing in mind that some people have different feelings towards the SEC’s rule.
Industry Reactions
The crypto industry has expressed skepticism about the likelihood of overturning the veto. Alexander Grieve, an executive at Paradigm, noted that reaching the necessary votes is “likely impossible.”
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This sentiment is echoed by Cody Carbone, Vice President of Policy for the Chamber of Digital Commerce, who believes the effort will ultimately fail due to a significant shortfall in required votes.
Implications for TradFi and Digital Assets
The resolution aims to address concerns that the SEC rule restricts traditional financial institutions (TradFi) from custodian digital assets, potentially limiting the integration of these assets into the U.S. financial system.
Proponents argue that rescinding SAB 121 would facilitate greater involvement of banks in the crypto market, while opponents warn of the risks associated with financial instability.
This important vote is coming up in the House; the fight regarding the rule from the SEC and the effects on the financial sector goes on. The result will not only encompass the banks and the crypto business but also define the treatment of digital goods in the framework of the United States’ financial regulation.
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