President Biden to Veto Legislation Granting Financial Firms Custody of Bitcoin
The White House has announced that President Biden will veto legislation that would allow financial firms to hold custody of Bitcoin and other cryptocurrencies.
The legislation, known as the Digital Asset Custody Act, was passed by the House of Representatives in June with bipartisan support but has not yet been taken up by the Senate.
The White House has expressed concerns that the legislation would create risks to consumers and the financial system, and that it would be premature to grant financial firms custody of Bitcoin and other cryptocurrencies.
In a statement released by the White House, the administration said that the President’s senior advisors believe that it is premature to grant financial institutions the authority to hold digital asset custody. The statement added that the administration believes that there are significant risks associated with digital assets that could pose risks to consumers and the financial system. The statement also noted that the administration believes that it is important to take a comprehensive approach to digital assets and not to treat them like traditional financial assets.
The Digital Asset Custody Act would have allowed financial firms to hold Bitcoin and other cryptocurrencies on behalf of their customers. This would have been a significant change from the current regulatory landscape, which prohibits financial firms from holding cryptocurrency assets. The legislation was supported by the cryptocurrency industry, which argued that it would provide greater certainty and stability to the market.
However, the White House has expressed concerns that the legislation would create risks to consumers and the financial system. The administration has argued that cryptocurrencies are volatile and speculative investments, and that allowing financial firms to hold custody of these assets would expose consumers to unnecessary risks. The administration has also expressed concerns that cryptocurrencies could be used for illicit activities, such as money laundering and terrorist financing.
The White House’s decision to veto the Digital Asset Custody Act is a significant setback for the cryptocurrency industry. The legislation was seen as a major step towards wider adoption of cryptocurrencies, and its veto will likely slow the growth of the industry.
The cryptocurrency industry has expressed disappointment with the White House’s decision. The Blockchain Association, a trade group for the cryptocurrency industry, said in a statement that the President’s veto is a missed opportunity to bring the United States to the forefront of the digital asset revolution. The statement added that the Blockchain Association will continue to work with the Biden administration and Congress to develop a comprehensive and forward-looking policy framework for digital assets.
It is unclear what the future holds for the Digital Asset Custody Act. The legislation could be reintroduced in the next Congress, but it is unlikely to be passed without the support of the Biden administration.
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