The US Senate has just approved a bill that overturns guidelines set by the Securities and Exchange Commission (SEC) that discourage banks and large financial institutions from holding Bitcoin and other cryptocurrencies. This legislation, which was already passed by the House of Representatives last week, has now been approved by the Senate with a vote of 60-38 and will be sent to President Biden for final approval.

The bill specifically reverses an SEC accounting rule that requires banks to classify cryptocurrencies held on behalf of clients as liabilities on their balance sheets. This rule has been seen as a hindrance to the adoption of cryptocurrencies by traditional financial institutions.

Senator Cynthia Lummis, a strong advocate for Bitcoin, believes that the passage of this legislation marks the beginning of a new era for the crypto industry. She sees it as a victory for financial innovation and a clear message to the Biden administration and SEC Chairman Gary Gensler, who have been criticized for their hostile stance towards cryptocurrencies.

In addition, this bill is significant because it is the first standalone crypto legislation to be passed by Congress, indicating a growing recognition of the importance of cryptocurrencies in the financial landscape.

Republican Representative Mike Flood, the author of the bill, explains that its purpose is to remove barriers that prevent regulated banks from acting as custodians of digital assets, ensuring that consumers are protected in their interactions with cryptocurrencies.

However, despite the bill’s success in Congress, the Biden Administration has expressed its intention to veto it. They argue that it would limit the SEC’s ability to regulate and address potential issues related to cryptocurrencies and their impact on financial stability.

It is important to note that the opinions expressed in this article are not investment advice. Investors should conduct their own research and exercise caution when investing in high-risk assets like Bitcoin and other cryptocurrencies. Transfers and trades are made at the investor’s own risk, and any losses incurred are their responsibility. The Daily Hodl does not endorse the buying or selling of cryptocurrencies and is not a financial advisor.