Read about the latest development in the United States as lawmakers at the House Financial Services Committee vote in favor of a resolution seeking to overturn a SEC guideline, potentially allowing banks to engage in crypto custody services. Additionally, uncover the impact of Blast's Ethereum layer-2 mainnet launch, unlocking billions of staked crypto and attracting attention in the crypto community.
The House Financial Services Committee (HSFC) recently made a significant move towards revolutionizing the cryptographic landscape in the United States. During a Feb. 29 markup hearing, 31 members of the HSFC, spanning both political spectrums, voted in favor of a resolution aimed at overturning the contentious Staff Accounting Bulletin No. 121 (SAB 121) introduced by the United States Securities and Exchange Commission (SEC) in March 2022. The resultant resolution, if approved, could eliminate roadblocks preventing highly regulated banks from serving as custodians of digital assets. Under the current SEC guideline, institutions custodying crypto assets are required to record them as liabilities on their balance sheets, a restriction that the resolution aims to overturn.
The resolution, advocated for by Republican congressman Mike Flood and Democrat representative Wiley Nickel, aims to address the apparent unfairness encountered by banks seeking to offer crypto custody services. Flood highlighted that requiring banks to hold digital assets on a balance sheet would significantly impact their regulatory obligations, such as capital and liquidity requirements. The resolution, introduced on Feb. 1, asserts that SAB 121 overstepped its boundaries as an accounting bulletin and effectively assumed the status of a de facto law. It is important to note that the resolution must pass a full floor vote in both the House and the Senate before SAB 121 can be annulled.
In response to the movement by the HSFC, crypto-friendly Republican Congressman Tom Emmer emphasized the allegedly biased stance of the SEC's Char Gary Gensler and the negative implications of SAB 121 on the digital asset ecosystem. Emmer argued that SAB 121 introduced unnecessary and avoidable concentration risk into the crypto ecosystem, citing the lack of custodial services provided by banks for approved Bitcoin ETFs as a hazardous outcome. On the contrary, Democrat Congresswoman Maxine Waters, one of the lawmakers who voted against the resolution, branded the move to rescind SAB 121 as an ironic one from crypto-friendly politicians, expressing concern about the lack of clarity surrounding crypto assets and the potential blockage of SEC staff from providing such clarity.
In parallel to this legislative development, the Ethereum community witnessed a major milestone with the launch of Blast's mainnet for Ethereum layer 2. The launch, which occurred on Feb. 29 at 9:00 pm UTC, resulted in the release of nearly $2.3 billion in staked crypto, attracting investors' attention. Blast, an optimistic rollup blockchain scaler, offers users up to a 5% annual percentage yield on Ether and stablecoins held on the network, generated from staked ETH and United States Treasury Bills (T-Bills) managed by MakerDAO, the creator of the stablecoin Dai. Notably, around $400 million in Ether was unlocked and withdrawn from the network post-mainnet launch, marking a significant influx of liquidity. Prior to the launch, Blast's total value locked had surged to approximately $2.27 billion before settling at $1.87 billion after the launch, reflecting the profound impact of the event on the crypto landscape.
Despite the excitement surrounding the mainnet launch, Blast has not been without its controversies. Dan Robinson, research head at Blast Seed Investor Paradigm, expressed disagreement with Blast's decision-making and marketing strategies. Additionally, an exit scam involving a gambling protocol called "Risk on Blast" raised concerns within the community, underscoring the challenges and risks associated with new blockchain ventures.
The developments on both legislative and technological fronts underline the evolution and challenges faced by the crypto industry. Stay informed about these critical developments and their potential impact on the broader crypto ecosystem.
By subscribing, you agree to our Terms of Service and Privacy Policy. Get the latest updates and analyses on our Crypto Biz newsletter, providing insights into the business activities behind blockchain and crypto, delivered every Thursday. #Cryptocurrencies #Law #Business #Banks #SEC #ETF #Adoption #United States #Regulation #Blockchain #Ethereum #Launch #Layer2 #Mainnet
This comprehensive re-write of the news article, summarizing the US lawmakers' resolution and Blast's Ethereum mainnet launch, is tailored for posting on OMGfin, focusing on pertinent details and impact.
(TOM MITCHELHILL, COINTELEGRAPH, 2024)