Senate passes bill to eliminate anti-crypto banking policy

The US Senate on Tuesday passed a resolution to remove a de facto ban that prevents banks in the country from offering crypto custody services.

The vote generated cautious optimism from Bitcoin’s most ardent supporters online and in Congress, who remain wary of a likely veto from the presidential office.

Will crypto banking be possible in the US?

As voted on Thursday afternoon, HJRes.109 certifies Congress’ disapproval of Staff Accounting Bulletin 121 (SAB 121), which was published by the Securities and Exchange Commission (SEC) two years ago.

The bulletin provides accounting guidance for publicly traded banks that aim to provide services that protect their clients’ crypto assets.

Critics of SAB 121 call it a “rule” simply disguised as “guidance” that makes it extremely prohibitive and impractical to provide such services. House Rep. Tom Emmer (R-Minn.), for example, he called the newsletter one of SEC Chairman Gensler’s “blatant attempts to expand the authority of the SEC” and a sign of his “clear bias toward the digital asset ecosystem.”

The resolution passed the House of Representatives last week with 55% of the votes in favor. Thursday’s Senate vote was a more lopsided 60/38 split, with all Republicans voting in favor along with 11 Democrats.

Beating Biden

However, neither the House nor Senate votes garnered a strong enough majority to override a veto, something President Joe Biden has already pledged to do if it reaches his desk.

However, some are optimistic that Thursday’s result could change the administration’s mind. Many influential senators defected across party lines in the vote, including Democratic caucus leader Chuck Schumer (D-NY).

“The biggest impact of this vote is on agency behavior,” he tweeted Custodia Bank CEO Caitlin Long on Thursday, referring to the SEC’s hostile crypto-enforcement actions over the past year.

“This gives the people in the agencies who *HATE* what they’re doing the political backing to push back hard,” Long continued. “(Elizabeth Warren) will probably try to clamp down even more, but she’s past her prime.”

Elizabeth Warren arguments presented on Thursday in support of SAB 121 and the SEC, claiming that the bulletin only advises banks to provide reasonable disclosures about risks related to crypto custody.

The resolution marks the first piece of purely cryptocurrency-focused legislation passed by both houses of Congress.

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