The United States Congress has made a groundbreaking move by passing its first independent legislation on cryptocurrencies. This bill aims to reverse the contentious Staff Accounting Bulletin No. 121 (SAB 121) issued by the U.S. Securities and Exchange Commission (SEC). However, President Joe Biden has threatened to veto this decision due to concerns about financial stability and market uncertainty.
Last week, the U.S. Congress achieved a historic milestone by passing its first independent legislation on cryptocurrencies. The bill’s objective is to overturn the controversial Staff Accounting Bulletin No. 121 (SAB 121) issued by the U.S. Securities and Exchange Commission (SEC).
U.S. Senator Cynthia Lummis (R-WY) announced on the social media platform X on Thursday that the Senate’s approval of the Congressional Review Act (CRA) to reverse SAB 121 is a significant triumph for financial innovation. It also serves as a clear rebuke of the Biden administration and SEC Chair Gary Gensler, who she claims have been unjustly targeting cryptocurrencies. Senator Lummis highlighted that this is the first time Congress has passed stand-alone legislation on cryptocurrencies and hinted at future endeavors. The CRA is a law that grants Congress the authority to review and potentially overturn regulations issued by federal agencies.
SAB 121 requires entities that hold cryptocurrencies for users to record them as liabilities and corresponding assets at fair value on their balance sheets. This bulletin has faced criticism for potentially placing substantial financial burdens on banks and financial institutions, which may discourage them from offering custody services for cryptocurrencies.
House Financial Services Committee Chair Patrick McHenry (R-NC) described the situation, stating, “SAB 121 requires financial institutions and firms that are safeguarding their customers’ digital assets to hold those assets on their balance sheet, making it cost prohibitive to do so.” The congressman emphasized that Staff Accounting Bulletin 121 is one of the most blatant examples of regulatory overreach witnessed during Gary Gensler’s tenure at the SEC.
The U.S. House of Representatives voted to overturn SAB 121 earlier this month, followed by the U.S. Senate’s decision to repeal the bulletin last week. However, President Joe Biden has threatened to veto this decision. The White House issued a statement explaining that limiting the SEC’s ability to maintain a comprehensive and effective regulatory framework for cryptocurrencies would introduce significant financial instability and market uncertainty.
What are your thoughts on the first independent legislation on cryptocurrencies passed by the U.S. Congress and the controversy surrounding SAB 121? Let us know in the comments section below.
