President Biden vetoes crypto custody bill
President Joe Biden has vetoed H.J.Res. 109, a congressional resolution that would have overturned the Securities and Exchange Commission's current
President Joe Biden has vetoed H.J.Res. 109, a congressional resolution that would have overturned the Securities and Exchange Commission's current
“…approach to banks and crypto.
Specifically, the resolution targeted the SEC’s Staff Accounting Bulletin 121, which presents guidance around how banks can handle customers’ crypto assets — in effect, they must treat those assets as liabilities. Banking groups have criticized this approach as making it prohibitively expensive for them to handle crypto, while regulators argue it’s necessary to protect investors, particularly after the collapse of high-profile crypto companies like FTX.”
A checking account is a liability to a bank because it must be prepared to pay out the balance if the account holder decides to withdraw. Forcing banks to treat crypto holdings as liabilities makes the bank hold more in reserves in order to be better prepared for a bank run.
This sounds good to me. To my understanding, banks in the US do not actually have to hold any money in reserve for it's customers as of... 2020?
Hey I found the FED posting! https://www.federalreserve.gov/monetarypolicy/reservereq.htm
This is my favorite part "As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020. This action eliminated reserve requirements for all depository institutions."
Happy Halloween kids. 😈
Meh. If you're investing in crypto then you're accepting the risks.
If I underatand correctly, you're saying banks should be allowed to accept the risk of crypto market fluctuations and scams.
Unfortunately when banks lose bets, they effectivel hold the economy hostage until taxpayers bail them out.
Much better to tell them if they want to offer crypto holdings, they need to be able to cover total loss of it.
If that means banks can't hold crypto, I won't shed a tear.
Crypto is meant for self custody anyway, not great if everyone is relying on a bank to do it for them.
Oh no! What will the crypto bros do?