The crypto industry is popping champagne corks (or maybe uncorking its digital wallets) after a surprise victory in the US Senate. The upper house voted 60-38 on Thursday to repeal a controversial rule introduced by the Securities and Exchange Commission (SEC) known as SAB 121.
Regulators back down
The rejected rule would have required banks holding digital assets for their customers to classify them as liabilities on their balance sheets. According to the Chamber of Digital Commerce, the leading blockchain trade association, this would have effectively closed the door to banks offering Bitcoin childcare services.
Industry experts argued that SAB 121 lacked economic justification and primarily served to stifle innovation by limiting access to secure storage solutions for digital currency investors.
Austin Campbell, founder of Zero Knowledge Consulting, went further, suggesting that the rule “benefits unregulated custodians,” potentially leaving crypto holders exposed.
A Bipartisan Surprise: Democrats Join the Cryptocurrency Choir
The Senate vote wasn’t just a victory for the crypto industry; it was a surprising display of bipartisan cooperation. As many as 12 Democrats defied party lines to vote alongside Republicans in favor of repealing the rule.
The unexpected alliance reflects the cryptocurrency’s growing recognition, bolstered by Bitcoin’s recent success in securing a spot exchange-traded fund (ETF) earlier this year.
Wall Street wants Bitcoin, the House of Representatives wants Bitcoin, and now the Senate wants #Bitcoin. pic.twitter.com/lLqBv2XZJy
– Michael Saylor⚡️ (@saylor) May 16, 2024
Michael Saylor, a staunch Bitcoin advocate and co-founder of MicroStrategy, which holds a massive Bitcoin hoard, took to social media to celebrate, declaring: “Wall Street wants Bitcoin, the House of Representatives wants Bitcoin , and now the Senate wants Bitcoin. »
The Final Hurdle: Can Crypto Overcome the Veto?
Even if the Senate vote constitutes a significant victory, the champagne corks may have to be suspended for now. US President Joe Biden has already expressed support for the SEC’s approach to regulating cryptocurrencies, and the White House has indicated it may veto the resolution.
This casts uncertainty on the future of the repealed rule. Industry players are cautiously optimistic, with Robert Leshner of Compound Labs calling this the “first of many” legislative victories for crypto. However, the specter of a veto looms large, reminding everyone that the battle for widespread acceptance of cryptocurrency is far from over.
The cryptocurrency industry is clearly gaining ground in Washington, but the path to full regulatory clarity remains fraught with challenges. With a potential veto on the horizon, the next few weeks will be crucial in determining whether this Senate victory will translate into lasting progress for crypto in the United States.
Featured image from Getty Images, chart from TradingView
