During a hearing on July 11, Christy Goldsmith Romero, the nominee for the head of the Federal Deposit Insurance Corporation (FDIC), testified to Congress that banks should be allowed to custody crypto assets.
When prompted by Senator Cynthia Lummis, the FDIC nominee responded that crypto is “another business just like any other business” before explaining her belief that it is not the FDIC’s role to instruct banks on which assets to custody or hold.
The Digital Chamber, a Washington, DC-based crypto advocacy group, previously expressed interest in Romero’s nomination. In a letter to the Senate Committee on Banking, Housing, and Urban Affairs, it cited her forward-looking stance on the crypto industry.
Senator Lummis’ question was the only outright mention of crypto during the nomination hearing to evaluate candidates for roles at the FDIC, Securities and Exchange Commission, the United States Treasury and the Financial Stability Oversight Council.
Congress fails to overturn Biden’s veto of SAB-121 repeal
The nomination hearing came on the same day Congress failed to overturn President Joe Biden’s veto of the Staff Accounting Bulletin-121 (SAB-121) repeal, with the final vote falling along party lines and 60 votes shy of a two-thirds majority.
SAB-121 is an SEC rule requiring banks that custody crypto assets to hold the assets as liabilities on their balance sheets. In a roundabout way, this disincentivizes banks from holding digital assets on behalf of customers.
Related: House fails to override Biden’s veto on nullifying SEC crypto rule
The ongoing regulatory battle in the US
Cryptocurrencies have been thrust into the national spotlight and have become a campaign issue ever since former President Donald Trump declared himself “the crypto President” and leveraged the hot-button issue, creating a fertile campaign battleground.
The 2024 election and ongoing SEC hostility have prompted a widespread response from industry executives, who are now meeting with DC lawmakers and mobilizing political initiatives like The Bitcoin Voter Project and the Stand With Crypto political action committee.
On the judicial front, the Supreme Court voted to overturn Chevron USA Inc. vs. Natural Resources Defense Council, reversing a 40-year precedent allowing federal regulatory agencies to engage in rulemaking without Congressional approval. This recent Supreme Court ruling could have seismic ramifications across America’s administrative state.
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