Senate's Approval of Legislation Signals Growing Consensus on Crypto Regulations
Senate's Approval of Legislation Signals Growing Consensus on Crypto Regulations
On May 16, 2024, the Senate approved legislation H.J.Res. 109, nullifying SEC’s SAB 121 that restricted financial institutions from holding cryptocurrencies in custody. This bipartisan support for the bill indicates a growing consensus among lawmakers for balanced crypto regulations. Ripple’s CLO, Stuart Alderoty, lauded the decision, criticizing SEC Chair Gary Gensler’s “unauthorized overreach,” while SEC Commissioner Hester Peirce, also known as “Crypto Mom,” criticized the SEC’s inconsistent crypto regulations approach. Uncertainty looms as President Biden may veto the resolution, maintaining the current custody framework for digital assets.
Key Takeaways
- Senate's approval of H.J.Res. 109 nullifies SEC's SAB 121, showcasing a growing bipartisan consensus for balanced crypto regulations.
- Ripple's CLO, Stuart Alderoty, and SEC Commissioner Hester Peirce express support for the decision, highlighting its potential to foster innovation and clarity in the crypto space.
- President Biden's potential veto adds uncertainty to the resolution's status, impacting the current custody framework for digital assets.
Analysis
The Senate's decisive approval of H.J.Res. 109 serves as a significant indicator of the increasing alignment among legislators regarding balanced crypto regulations. Ripple's CLO, Stuart Alderoty, and SEC Commissioner Hester Peirce's endorsement of the decision underscores its potential to drive innovation and provide clarity within the crypto industry. However, the potential of President Biden's veto introduces a layer of uncertainty, potentially preserving the existing custody framework. If the resolution becomes law, it may lead to a rise in cryptocurrency exposure for financial institutions, with repercussions for organizations like Coinbase and Gemini. Furthermore, the increased accessibility and regulatory certainty could prove beneficial for investors and crypto enthusiasts alike.
Did You Know?
- SAB 121: This Staff Accounting Bulletin by the SEC imposed restrictions on financial institutions, prohibiting them from holding cryptocurrencies in custody. H.J.Res. 109's approval would effectively nullify this bulletin, reinstating financial institutions' ability to hold cryptocurrencies in custody.
- Stuart Alderoty: As the Chief Legal Officer of Ripple, Alderoty praised the Senate's decision to nullify SAB 121 and criticized SEC Chair Gary Gensler's "unauthorized overreach" in restricting financial institutions from holding cryptocurrencies in custody.
- Hester Peirce: Also known as "Crypto Mom," Peirce, an SEC commissioner, has been vocal about the agency's inconsistent approach to regulating cryptocurrencies. In this instance, she underscored the necessity for clearer guidelines for financial institutions and crypto companies.