Security

US Financial Services Committee approvals resolution to overturn SEC crypto guideline for banks

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March 1, 2024

The U.S. House Financial Services Committee approved a resolution that would overturn the Securities and Exchange Commission's Staff Accounting Bulletin No. 121, which prevents banks from having custody of cryptocurrency. The SAB is not a law itself, but a guideline for banks, according to a report by Coin Telegraph.

"By overturning SAB 121, the Resolution will ensure consumers are protected by removing roadblocks that prevent highly regulated banks from acting as custodians of digital assets," the committee said in a statement.

Republican Congressperson Mike Flood introduced the resolution since he said that SAB 121 made it so cryptocurrencies were, "always considered off-balance sheet," and by getting rid of this requirement, "the on-balance sheet treatment would affect their other regulatory obligations like their capital and liquidity requirements."

Although the proposal has received bipartisan support, some members of Congress opposed it, such as Democrat Congressperson Maxine Waters.

"We often hear Republicans and the crypto industry complain about a lack of clarity from the SEC, but ironically, the resolution before us effectively blocks the SEC staff from providing that clarity around crypto," Waters said in a statement.