The crypto industry is popping champagne corks (or perhaps uncorking their digital wallets) after a surprise victory in the US Senate. On Thursday, the upper chamber voted 60-38 to repeal a controversial rule introduced by the Securities and Exchange Commission (SEC) known as SAB 121.
The Regulators Reel Back
The defeated rule would have forced banks holding digital assets for clients to classify them as liabilities on their balance sheets. This, according to the Digital Chamber of Commerce, the leading blockchain trade association, would have effectively shut the door on banks offering Bitcoin custody 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 the rule “benefits non-regulated custodians,” potentially leaving crypto holders exposed.
A Bipartisan Surprise: Democrats Join The Crypto Chorus
The Senate vote wasn’t simply 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.
This unexpected alliance reflects the growing mainstream recognition of cryptocurrency, bolstered by Bitcoin’s recent achievement of gaining 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 vocal Bitcoin advocate and co-founder of MicroStrategy, which holds a massive Bitcoin treasury, 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 Outrun The Veto?
While the Senate vote is a significant win, the champagne corks might need to be put back on hold for now. United States President Joe Biden has previously expressed support for the SEC’s approach to regulating cryptocurrency, and the White House has indicated he may veto the resolution.
This throws the future of the repealed rule into uncertainty. Industry players are cautiously optimistic, with Compound Labs’ Robert Leshner calling this a “first of many” legislative victories for crypto. However, the specter of a veto looms large, reminding everyone that the battle for mainstream acceptance of cryptocurrency is far from over.
The cryptocurrency industry is clearly gaining traction in Washington, but the road to full regulatory clarity remains bumpy. With a potential veto on the horizon, the next few weeks will be crucial in determining whether this Senate victory translates into lasting progress for crypto in the United States.
Featured image from Getty Images, chart from TradingView
