- The US House of Representatives has passed a significant decision that could impact how banks handle cryptocurrency storage, causing waves in the Bitcoin and altcoin sector and financial regulations.
- The decision, known as House Joint Resolution 109, aims to nullify the Securities and Exchange Commission’s (SEC) Accounting Bulletin Statement (SAB) 121, issued in 2022, which mandates banks to hold their customers’ cryptocurrency assets on their balance sheets and maintain a setoff obligation.
- Proponents of the decision argue that this rule is too stringent for banks and stifles innovation and participation in the Bitcoin and altcoin sector.
This article delves into the US House of Representatives’ decision to change cryptocurrency storage rules, its potential impacts on banks, the crypto sector, investors, and markets.
Key Points of the Decision
The decision seeks to nullify the SEC’s SAB 121 issued in 2022. This bulletin requires banks to hold their customers’ cryptocurrency assets on their balance sheets and maintain a setoff obligation. Advocates of the decision argue that this rule is overly strict for banks and hampers innovation and participation in the Bitcoin and altcoin sector. Representative Patrick McHenry (R-NC) stated, “This rule makes it impossible for banks to hold their customers’ crypto assets.”
Democrats Oppose the Crypto Decision
Democrats opposed the decision, arguing that the SEC needs this rule to regulate the Bitcoin and altcoin market. Representative Maxine Waters (D-CA) stated, “Revoking this rule will make it harder to protect investors from fraud and maintain stability in the market.”
Potential Impacts of the Decision
- For Banks: The decision could significantly change how banks handle BTC and altcoin storage. Instead of holding cryptocurrencies on their balance sheets, banks might prefer to turn to third-party custodial services or stablecoins.
- For the Crypto Sector: The decision is expected to encourage innovation and participation in the crypto sector. Greater flexibility in Bitcoin and altcoin storage by banks could attract more institutional investors to the sector.
- For Investors: There are concerns that the decision could leave investors more vulnerable to fraud. Less responsibility for banks in cryptocurrency storage could increase the risk of fraud.
- For Markets: The decision could potentially cause instability in the market. Bitcoin and altcoin prices may become more volatile, and there could be more uncertainty in the market.
Conclusion
The decision is not expected to pass the Senate. The White House has also opposed the decision, with President Joe Biden indicating he would veto it. In conclusion, the US House of Representatives’ decision proposing changes to cryptocurrency storage rules is a significant development in the Bitcoin and altcoin sector and financial regulations. The ultimate effect of the decision will become clear after the Senate’s vote and the White House’s veto threat.
