In a landmark decision, the U.S. Senate has voted to repeal the controversial Staff Accounting Bulletin No. 121 (SAB 121), which was introduced by the Securities and Exchange Commission (SEC) in March 2022. The bulletin required financial institutions to list customers’ digital assets on their balance sheets, a mandate that critics argued placed substantial operational and financial burdens on firms handling cryptocurrencies.
The Senate’s vote reflects a significant bipartisan effort, with a dozen Democrats joining 48 Republicans to overturn the SEC’s policy. This move signals a growing recognition of the need for regulatory frameworks that better align with the evolving landscape of digital assets and financial technology.
SAB 121 has been a point of contention since its inception, with opponents arguing that it could expose customers’ assets to risks in bankruptcy situations. The policy was also criticized for potentially stifling innovation in the burgeoning crypto sector by imposing stringent accounting requirements on crypto custodians.
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Senator Cynthia Lummis, a proponent of the resolution to repeal SAB 121, highlighted the consumer risks under the policy. She argued that placing customers’ assets on institutional balance sheets could jeopardize those assets during bankruptcies, ultimately not protecting consumers at all.
The Senate’s decision is a win for financial innovation and marks the first time both chambers of Congress have passed standalone crypto legislation. However, the resolution is not without its challenges. President Joe Biden has indicated a potential veto, which could negate the Senate’s decision. The President’s stance underscores the ongoing debate over how to balance the need for consumer protection with the promotion of financial innovation.
As the situation unfolds, the crypto industry and its observers are closely watching the administration’s next steps. The repeal of SAB 121 could have far-reaching implications for the future of cryptocurrency regulation and the broader financial system. It remains to be seen how this decision will shape the regulatory environment and whether it will foster a more conducive atmosphere for the growth of digital assets.
In a landmark decision, the U.S. Senate has voted to repeal the controversial Staff Accounting Bulletin No. 121 (SAB 121), which was introduced by the Securities and Exchange Commission (SEC) in March 2022. The bulletin required financial institutions to list customers’ digital assets on their balance sheets, a mandate that critics argued placed substantial operational and financial burdens on firms handling cryptocurrencies.
The Senate’s vote reflects a significant bipartisan effort, with a dozen Democrats joining 48 Republicans to overturn the SEC’s policy. This move signals a growing recognition of the need for regulatory frameworks that better align with the evolving landscape of digital assets and financial technology.
SAB 121 has been a point of contention since its inception, with opponents arguing that it could expose customers’ assets to risks in bankruptcy situations. The policy was also criticized for potentially stifling innovation in the burgeoning crypto sector by imposing stringent accounting requirements on crypto custodians.
Senator Cynthia Lummis, a proponent of the resolution to repeal SAB 121, highlighted the consumer risks under the policy. She argued that placing customers’ assets on institutional balance sheets could jeopardize those assets during bankruptcies, ultimately not protecting consumers at all.
The Senate’s decision is a win for financial innovation and marks the first time both chambers of Congress have passed standalone crypto legislation. However, the resolution is not without its challenges. President Joe Biden has indicated a potential veto, which could negate the Senate’s decision. The President’s stance underscores the ongoing debate over how to balance the need for consumer protection with the promotion of financial innovation.
As the situation unfolds, the crypto industry and its observers are closely watching the administration’s next steps. The repeal of SAB 121 could have far-reaching implications for the future of cryptocurrency regulation and the broader financial system. It remains to be seen how this decision will shape the regulatory environment and whether it will foster a more conducive atmosphere for the growth of digital assets.