McHenry Pushes to Override Biden Veto on SEC’s Digital Asset Rule SAB 121

• In a recent development, Representative Patrick McHenry has pushed for the reversal of President Biden’s veto concerning SEC’s SAB 121.
• This initiative has garnered immense bipartisan support, with both major political parties rallying behind the cause.
• Critics argue that the SEC’s rule overreaches its authority, impacting banks’ digital asset custody practices detrimentally.

Rep. McHenry champions bipartisan-backed effort to overturn Biden’s veto on SEC’s SAB 121, spotlighting regulatory overreach concerns.

McHenry Advocates Reversal of Veto on SEC’s SAB 121

Representative Patrick McHenry, as the Chairman of the House Financial Services Committee, has fervently called for overruling President Biden’s recent veto aimed at blocking the SEC’s Staff Accounting Bulletin No. 121. This bulletin introduces stringent rules regarding the custody of digital assets by banks, which McHenry and his supporters believe are overly restrictive and unjustified.

Bipartisan Support for the Legislative Move

H.J. Res. 109, the resolution targeted by the veto, boasts significant backing from both sides of the political aisle. This collaboration reflects a unified stance concerning the need to overhaul existing digital asset policies in the United States. The resolution’s initial passage through both the House and Senate with considerable margins exemplifies robust legislative support. The bipartisan angle was further underlined with the passage of the Financial Innovation and Technology (FIT) for the 21st Century Act, aimed at repealing SAB 121.

Critics of SEC’s Regulatory Overreach

During the debate, significant voices like Representative Mike Flood highlighted discontent with the SEC’s perceived overextension of its regulatory boundary. Flood criticized SEC Chairman Gary Gensler’s approach, suggesting that responsibilities concerning digital asset custody should lie with entities like the Federal Reserve and the Treasury Department, rather than the SEC.

Concerns Over Banking Practices and Stability

Critics argue that SAB 121 imposes undue burdens on banks, potentially stifling innovation and consumer options in the digital asset market. Mike Flood notably pointed out, “The SEC’s intrusive measures are a blatant overreach, undermining the established custody norms in the banking sector.” The sentiment resonates across both parties, reinforcing calls for a reassessment of the SEC’s current stance on digital asset custody regulations.

Conclusion

The ongoing legislative battle over SEC’s SAB 121 underscores a broader struggle about regulatory control and innovation within the digital asset space. With bipartisan support rallying against the perceived excesses of the SEC, it remains to be seen how these developments will shape the future of digital asset regulations in the US. Policymakers are keen on striking a balance that fosters innovation while safeguarding consumer interests. The resolution’s journey highlights a dedicated effort to recalibrate digital asset policies, promoting a more balanced regulatory environment.