The House Financial Services Committee of the U.S. Congress has moved to repeal SEC Staff Accounting Bulletin 121 (SAB 121), which restricts banks and financial institutions from offering cryptocurrency custody services. Resolution 109, submitted by Rep. Mike Flood and Rep. Wiley Nickel, seeks to disapprove SAB 121, arguing that it unfairly excludes regulated institutions from the crypto custody market. The resolution, advanced with bipartisan support, is now poised for a vote on the House floor. However, legal experts suggest it faces challenges in passing through the House, Senate, and receiving presidential approval.

The advancement of Resolution 109 by the House Financial Services Committee reflects ongoing debates within Congress regarding the regulatory framework for cryptocurrency custody services. Supporters argue that SAB 121 imposes undue restrictions on regulated institutions, limiting their ability to participate in the growing crypto market. However, critics, including Better Markets, express concerns about Congress’s expertise in handling complex regulatory matters like SABs. They emphasize the technical nature of SEC bulletins and the extensive deliberation involved in their formulation.

While proponents seek to expand access to crypto custody for regulated institutions, critics caution against hasty regulatory changes that could undermine investor protection and market stability. Ultimately, the resolution’s fate will depend on further deliberation and scrutiny in Congress, highlighting the importance of informed decision-making in shaping the regulatory landscape for cryptocurrencies.