United States Legislatures Move to Reverse The President’s Cryptocurrency Custody Veto

In May 2024, the United States House unanimously voted to reverse the President’s Securities and Exchange Commission SAB 121 rule, which requires regulated companies into cryptocurrency custody to enter their holdings in a balance sheet. A statement from the White House later said that the president had vetoed the said bill, with an excuse that it could affect SEC’s ability to create some ‘guardrails’ in the industry.

The subject of last month’s President Biden’s veto was channeled to the cryptocurrency industry. The proposed legislation intended to provide regulatory clarity and rules for custodial services. The veto elicited different responses from legislators, business executives, and the broader cryptocurrency community.

The legislation’s proponents contend that encouraging innovation and investor confidence in the emerging cryptocurrency business requires clear regulatory frameworks. A strong advocate for the new cryptocurrency custody laws, Congresswoman Sarah Johnson (D-NY) highlighted the possible advantages of overriding the veto.

Bitcoin Market Reacts Positively Following Proposed Reverse in Biden’s Veto

At a recent committee hearing, Johnson said that “clarity and regulatory certainty are critical for the growth of the cryptocurrency industry.” She added, “We can promote ethical innovation and shield consumers from possible hazards by laying out precise rules for custodial services.” The bitcoin markets are already experiencing excitement due to the parliamentary drive to override Biden’s veto.

Market analysts, a positive result would increase investor confidence further and lead to a broader market rise. Leaders in the industry have also expressed support for overriding the veto, pointing out how crucial clear regulations are to promoting the widespread use of cryptocurrencies.

As of press time, the market already experienced a major recovery in the last 24 hours, with the global market capitalization growing by 4.3% in 24 hours. However, all major cryptocurrencies are trading green at the moment. 

Opposition Warns Of Continued Strict Cryptocurrency Laws 

Opponents of the proposed legislation contend that overly strict regulations may hinder innovation and force companies to relocate outside jurisdictions with more benevolent regulatory frameworks. The possible effects on smaller cryptocurrency firms and the necessity of well-balanced policies that promote expansion while reducing risks have drawn criticism.

The reason for a possible reserve in the bill is linked to the developing political atmosphere in the United States, as Republicans and Democrats are looking to gain voter’s support for the upcoming election. Observation on ZyCrypto says that most Democratic party supporters are hardcore cryptocurrency advocates.

This is happening as the former United States president, Donald Trump, leads the presidential campaign using cryptocurrency pro statements. If the majority of the House reverses this bill, it is expected to be a major win for the cryptocurrency community, which is already experiencing growing selling pressure followed by a dwindling market price. 

Biden Insists on His Position, Says House Decision Detrimental 

Biden also noted that this move by the House will, by extension, affect the future performance of customers and investors. As of press time, the said bill has been returned to the House of Representatives and has been labeled as a yet-to-reviewed legislation.

The House is looking to reverse the existing presidential veto until a possible review is done. The final decision for the reversion is slated for next week through a voting process. According to the voting arrangement, there will be a need for two-thirds of the House to vote in favor of it to be passed.

While commenting on the development, Alexander Grieve from Paradigm Technology says that the bill will be difficult to resolve quickly. He said this is because of bipartisan support in the process. Grieve also added that he’s still hopeful a reverse is possible regardless.

Ethereum and Bitcoin, in the last 24 hours, have grown by  5.3% and 4.5%, respectively. Cardano (ADA) and Ripple (XRP) also gained 7% and 8% respectively. Meanwhile, Bitcoin’s 2-day chart shows a re-accumulation activity, and it will commence a bull run once the phase is complete.