Crypto Custody Legislation Is Now Blocked By Joe Biden Administration

Key Points:

• Biden administration to veto crypto custody legislation over stability and investor protection concerns.
• Biden’s budget proposes a 30% tax on crypto mining electricity costs.
• Senators raise concerns on crypto sanctions evasion, prompting scrutiny from the Biden administration amid global regulatory efforts.

The Biden administration has announced its intention to veto legislation that would grant highly regulated financial firms the ability to custody Bitcoin and other cryptocurrencies.

Biden Administration Plans Veto on Crypto Custody Legislation

The administration argues that the proposed crypto custody legislation, H.J. Res. 109, would disrupt the Securities and Exchange Commission’s efforts to safeguard investors in crypto markets and ensure the stability of the broader financial system.

The veto announcement for crypto custody legislation comes amidst heightened scrutiny on crypto-assets, with President Joe Biden‘s fiscal 2025 budget proposal unveiling plans for new taxes, including an excise tax on cryptocurrency mining. This tax would levy a 30% charge on the electricity costs associated with mining digital assets.

Senators Raise Alarm on Crypto Sanctions Evasion

Additionally, U.S. Senators Elizabeth Warren and Roger Marshall have intensified pressure on the Biden administration regarding the potential misuse of cryptocurrencies to evade sanctions. In a letter addressed to officials, including Treasury Secretary Janet Yellen and Defense Secretary Lloyd Austin, they sought clarity on measures to prevent sanctioned entities in countries like Russia, Iran, and North Korea from utilizing digital assets like stablecoin Tether.

Meanwhile, the European Parliament recently passed comprehensive anti-money laundering legislation, which includes provisions impacting cryptocurrencies and crypto-assets. This move reflects a broader international effort to regulate the use of digital currencies and combat illicit financial activities.

The Biden administration’s stance underscores growing regulatory concerns surrounding cryptocurrencies, particularly regarding their potential impact on financial stability and compliance with existing regulatory frameworks. As discussions continue both domestically and internationally, the future regulatory landscape for cryptocurrencies remains uncertain.