The Biden administration and the HJ Res. 109 bill
The Biden administration is opposing HJ Res. 109, a proposed bill that would allow highly regulated financial institutions to custody bitcoin and other cryptocurrencies. This measure seeks to repeal the Securities and Exchange Commission's (SEC) Staff Accounting Bulletin (SAB) No. 121, which requires these institutions to list digital assets on their balance sheets, adding significant regulatory costs and effectively prohibiting them from managing these assets.
Arguments and controversies
U.S. Congressman Patrick McHenry and others argue that SAB 121 represents regulatory overreach and hampers innovation by forcing banks to treat digital assets differently than other custody assets. In contrast, Congressman French Hill criticized the requirement to hold reserves against custody assets as inconsistent with standard financial practices.
President Biden's position
Despite these criticisms and the passage of the bill in the House of Representatives, President Biden has expressed his intention to veto it, claiming that it could undermine the SEC's efforts to ensure investor protection and financial system integrity in the crypto market. Meanwhile, the bill has received sufficient bipartisan support and will be up for debate in the Senate.
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