its stance on proposed legislation, H.J. Res. 109, that would allow highly regulated financial firms to act as custodians for Bitcoin and other cryptocurrencies.
H.J.Res. 109 would overturn the SEC’s Staff Accounting Bulletin No. 121, which imposes restrictions on financial institutions regarding the custody of digital assets, under the Congressional Review Act . By overturning SAB 121, this bipartisan resolution would remove roadblocks that prevent highly regulated financial institutions and firms from acting as custodians for Bitcoin and digital assets.
“SAB 121 requires financial institutions and firms that are safeguarding their customers’ digital assets to hold those assets on their balance sheet," McHenry continued. “That means banks would be required to take on significant capital, liquidity, and other costs under the existing prudential regulatory framework. This essentially makes it cost prohibitive for financial institutions to custody their customers’ digital assets.