In this post:
- The controversial veto of the SAB 121 bill by US President Joe Biden could be voted on by the House of Representatives next week.
- The proposed SAB 121 rule requires crypto holders to report their holdings on company balance sheets.
- The House of Representatives is constitutionally obligated to vote on whether to overturn or sustain the president’s veto.
The House of Representatives is expected to vote on President Joe Biden’s veto of Staff Accounting Bulletin 121, a decision that has sparked controversy. In May, President Biden vetoed a resolution to overturn Staff Accounting Bulletin 121, also known as SAB 121.
The bulletin has sparked considerable debate in the past year due to concerns within the crypto industry that it may hinder banks from effectively protecting digital assets. Firms that custody crypto must record customer crypto holdings as liabilities on their balance sheets.
SAB 121 goes to the House next week
According to a weekly schedule posted by House Majority Leader Steve Scalise, SAB 121 is currently on the House’s “legislation that may be considered” list. This proposed rule would require SEC-reporting entities that hold cryptocurrencies to include those holdings on their balance sheets.
According to the weekly schedule, the resolution may be discussed on Tuesday or Wednesday next week. It is imperative that they fulfill their constitutional duty and hold another vote on SAB 121.
The measure received a favorable vote of 228-182 in the full House back in May, with support from mostly Republicans and 21 Democrats. A week later, the Senate voted 60 to 38, with a number of Democrats, including Senate Majority Leader Chuck Schumer, D-N.Y., voting in favor of the measure.
Some critics claim that SAB 121 could hinder American banks from effectively managing crypto exchange-traded products on a large scale. This, in turn, may lead to a potential risk of concentration by granting more control to non-bank entities.
What is needed to veto Biden’s position on SAB 121?
Nevertheless, overturning Biden’s veto will require a two-thirds majority vote from both the House and Senate.
With just 55.6% and 61.2% of the House and Senate members voting for the resolution in May, it is clear that additional support from Democrats is crucial this time around.
According to Alexander Grieve, the head of government affairs at venture capital firm Paradigm, this may not be impossible. Grieve said in a post on X on Friday that:
Remember when Biden vetoed the SAB121 rollback? It’s back on the House floor next week — let’s see if the House can rally a 2/3 vote to overturn the veto (steep hill to climb but not impossible given how bipartisan the FIT vote was)
Alexander Grieve
The House would need 290 members to favor overriding the veto, which would be around 60 more votes than the 228 who first voted for it.
Donald Verrilli claims regulators want to ‘debank’ crypto
According to Donald Verrilli, the former solicitor general of the United States from 2011 to 2016, federal regulators have been involved in extensive and coordinated actions to limit the involvement of the digital asset industry in the banking sector.
As part of a July 3 amicus brief filed with the U.S. Tenth Circuit Court of Appeals. Representing the Blockchain Association, Verrilli provided support for an appeal made by Custodia Bank.
Following a March ruling by the U.S. District Court for the District of Wyoming, Custodia has filed an appeal with the Tenth Circuit, contesting the Federal Reserve’s refusal to grant the bank access to a master account.
Several other parties have also filed amicus briefs in support of Custodia’s appeal. These include former U.S. Senator Pat Toomey, Wyoming Secretary of State Chuck Gray, and members of the U.S. Senate Banking Committee and U.S. House Financial Services Committee.
Paul Clement, a former U.S. Solicitor General, filed a brief on behalf of the Digital Chamber and Global Blockchain Business Council, arguing that Custodia had lost favor with federal regulators.
