Biden’s Stance on Bitcoin Custody Boosts XRP Prospects

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US President Joe Biden has announced that he will not support the custody of Bitcoin by any institution.

Consequently, this move has the potential to position XRP as the sole regulated cryptocurrency based on the US judicial system. As a result, XRP Ledger (XRPL) decentralized finance (DeFi) is expected to experience a notable surge.

Potential Surge for XRPL DeFi and CTF Token

The announcement has prompted speculation about the future of XRPL DeFi, particularly the CTF token, the top DeFi token on XRPL. Market analysts suggest that the value of the CTF token could soar to $374.25 per token, reaching a market capitalization of $10 billion. This anticipated shift in market dynamics is attributed to a potential influx of investment into XRP and its associated DeFi ecosystem.

The broader crypto community initially dismissed the idea of XRP taking a leading role, but recent developments support this emerging reality. Investors and stakeholders in the XRP ecosystem are preparing for potential profits, with increased attention on the CTF token trade.

Political Reactions to Bitcoin Custody Legislation

President Biden’s administration has stated its intention to veto H.J. Res. 109, a House Joint Resolution aimed at overturning the SEC’s Special Accounting Bulletin 121 (SAB 121). This bulletin imposes strict guidelines on how financial institutions can custody crypto assets. Specifically, it requires banks to hold customers’ crypto assets on their balance sheets, a practice not applied to traditional assets.

US Congressman Patrick McHenry, Chairman of the House Financial Services Committee, criticized SAB 121 as regulatory overreach. He argued that the SEC’s stance under Gary Gensler’s leadership needs to be more relaxed.

Similarly, Congressman French Hill has voiced his opposition, emphasizing that holding reserves against custodial assets is not standard practice in financial services.

Legislative Developments and Veto Threat

The House of Representatives recently voted to pass H.J. Res. 109, which aims to nullify SAB 121. The bipartisan bill passed with 228 votes in favor and 182 against, with support from 21 Democratic members. Despite this, President Biden has reiterated his opposition, threatening to veto the bill should it reach his desk.

The White House has defended its position, arguing that SAB 121 is crucial for protecting investors in the crypto market and maintaining financial stability. It asserts that limiting the SEC’s regulatory authority could lead to substantial financial instability and market uncertainty.

The debate over crypto custody is unfolding against a backdrop of broader regulatory concerns. Some industry observers believe that a Republican administration might adopt a more favorable stance toward Bitcoin and cryptocurrency in general. Multinational bank Standard Chartered has suggested that looser regulations and approvals for exchange-traded funds (ETFs) could be expected under a Republican-led government.

Former SEC official John Reed Stark has echoed this sentiment, predicting that a pro-crypto official, such as Hester Peirce, might lead the SEC under a Republican presidency. Peirce has been a vocal critic of SAB 121, arguing that it discourages regulated banks from acting as crypto custodians and treats crypto assets differently from other financial assets.

Will the SEC Approve Any Of The Recent Bitcoin Spot ETF Applications?

People often ask for my opinion on whether the SEC will approve any of the recent spate of bitcoin spot ETF applications, which is an interesting and important question.

My take is that the current SEC will… pic.twitter.com/lPXebl03Y4
— John Reed Stark (@JohnReedStark) August 13, 2023

The current legislative efforts aim to remove barriers that prevent highly regulated financial institutions from providing custodial services for digital assets. Proponents argue that overturning SAB 121 would ensure better protection for consumers by allowing established financial institutions to manage crypto assets.

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