U.S. Senate Passes Bill to End Anti-Cryptobanking Policy

The U.S. Senate passed a resolution on Tuesday to end the de facto ban preventing national banks from offering cryptocurrency custody services. The vote sparked cautious optimism among the most ardent Bitcoin supporters online and in Congress, who remain wary of a potential presidential veto.

As voted on Thursday, H.J.Res.109 confirms Congressional disapproval of Staff Accounting Bulletin 121 (SAB 121), issued by the Securities and Exchange Commission (SEC) two years ago. The bulletin provides accounting guidance for banks aiming to offer custody services for their clients’ crypto assets.

Critics of SAB 121 call it a ‘rule’ merely disguised as ‘guidance,’ making it extremely costly and impractical to offer such services. House Representative Tom Emmer, for example, called the bulletin one of the unprecedented attempts by SEC Chair Gensler to expand the SEC’s authority and a sign of his clear bias against the digital asset ecosystem.

The resolution passed through the House of Representatives last week with 55 percent in favor. The Senate vote on Thursday was split 60/38, with all Republicans voting in favor along with 11 Democrats.

However, neither the votes in the House nor the Senate garnered a strong enough majority to override a veto, something President Joe Biden has already promised to do if and when it reaches his desk. Still, some are optimistic that Thursday’s outcome could prompt the presidential administration to reconsider. Many influential senators broke from party lines during the vote, such as Democratic club leader Chuck Schumer.

Senator Elizabeth Warren presented arguments in favor of SAB 121 and the SEC on Thursday, claiming that the bulletin merely advises banks to provide reasonable information about the risks associated with cryptocurrency custody. The resolution marks the first piece of legislation solely focused on crypto to pass through both houses of Congress.