Source: Bitcoinist

Compilation: Blockchain Knight

The next two weeks could be decisive for the crypto industry,** as it faces major legislative developments in the U.S. Congress that could reshape the regulatory landscape for digital assets in the United States. **

The industry is closely watching the upcoming Senate vote on the repeal of Employee Accounting Proclamation No. 121 (SAB 121). SAB 121 was originally issued by the SEC (United States SEC) and requires Financial Institution to list the digital asset in custody for customers on their balance sheets.

This approach differs from the traditional treatment of custodial assets, which do not consider custodial assets as part of the company's own balance sheet. Critics argue that this could unfairly exaggerate the bank's assets and liabilities, leading to increased capital reserve requirements and potentially killing the rise of crypto custody services.

Last week, a bipartisan effort in the House of Representatives to repeal the rule saw 21 Democrats join the ranks of Republicans.

Ron Hammond, director of government relations at the Blockchain Association, said via X, "Last week, 21 Democrats voted hard and joined Republicans in repealing the SEC's SAB 121. This is an issue that is important to both banks/crypto assets, and is a personal priority for SEC Chairman Gensler."

The Senate, led by Senator Cynthia Lummis, is expected to follow suit this week. However, President Biden has said he plans to veto the bill, which would require longest two-thirds of Congress to override the veto. **

"With so few longing votes in both the House and Senate, we've seen a number of Congressional Review Bills (CRAs) put on the president's desk on a bipartisan basis, but all failed at this stage," Hammond said. It would take a two-thirds vote in Congress to overturn. Biden plans to veto this bill, so he has to climb this difficult mountain."

Another key legislative item on the agenda is a bill introduced by Reps. Larry Bucshon and Lisa Blunt Rochester.

The bipartisan initiative is scheduled to vote this week for the Commerce Department to serve as the president's chief adviser on Blockchain issues. The bill also proposes the creation of an advisory group within the Department of Commerce to further integrate Blockchain technology into federal governance and policymaking.

Another high-profile legislative push is the upcoming vote on FIT 21, which will take place on May 23-24. Written by House Financial Services Committee Chairman Patrick McHenry,** the bill represents the first comprehensive attempt to establish a regulatory framework for crypto assets at the federal level. **

Hammond emphasized, "FIT 21 is a valuable achievement of Patrick McHenry and the first time Congress has voted on a regulatory framework for crypto assets. It's a moment that's been nearly a decade in the making."

The bill has attracted a great deal of attention, and its amendments have been crucial in shaping its final form, appealing to both Democratic and Republican lawmakers.

These legislative efforts come against the backdrop of heightened regulatory scrutiny by SEC Chairman Gary Gensler and the Biden administration's increased concern about the alleged risks of crypto assets.

The government believes that SAB 121 is essential to protect investors and maintain the stability of the financial system. Conversely, Congress and longing in the industry argue that the SEC's current practices hinder innovation and fail to provide clear compliance guidance.

In addition, the intersection of Crypto policy and election-year dynamics should not be underestimated. **

With former President Trump's recent endorsement of crypto assets and their bipartisan potential, crypto asset policy is becoming an important campaign issue.

"There's little political risk of Trump stepping into the crypto space, but it would be of great benefit given that both parties won the campaign for crypto assets in the primaries," Hammond noted. This positions crypto assets as a unique issue that can influence the demographics of the electorate, especially younger voters who have shown a sustained interest in digital asset technology."