The U.S. House of Representatives is set to vote on major cryptocurrency legislation on Wednesday, July 10. The vote could override President Joe Biden’s veto of the Securities and Exchange Commission’s (SEC) resolution to repeal Staff Accounting Bulletin 121 (SAB 121). In June, Biden vetoed the bill. It has garnered considerable attention due to its impact on the custody of Bitcoin and other crypto assets by financial institutions.
In 2022, the SEC issued SAB 121, which requires banks that hold cryptocurrencies to report these assets as liabilities on their balance sheets. Many in the cryptocurrency industry have questioned this accounting treatment, arguing that the additional regulatory burden discourages banks and other institutional players from dealing in digital assets.
D-Day for cryptocurrencies
The Chamber initially pass The resolution opposing SAB 121 passed in early May by a vote of 228 to 182, with 21 Democrats supporting it and unanimous Republican support. President Biden vetoed the resolution anyway. That led to the scheduling of a veto override vote, which requires a two-thirds majority in both the House and Senate to pass.
Ron Hammond of the Blockchain Association Underlines the unusual political dynamics at play, noting that “cryptocurrency has now found itself at the heart of the campaign.” He emphasized the bipartisan nature of previous votes and underscored the uphill battle ahead, saying, “this effort is an uphill climb as only 21 Democrats in May joined all Republicans in support (significantly below the 2/3 threshold needed).”
Perianne Boring of the Digital House added urgency to the discussion, stressing the need for greater Democratic support: “The bill to repeal SAB 121 SAB 121 will be put to the House floor for a vote this week following the President’s veto on May 31. This vote, mandated by the Constitution, requires a 2/3 majority to override the veto. We need approximately 60 additional Democrats in the House to support our bill to end SAB 121.”
Other ways
In response to the challenges of overriding the veto, discussions among lawmakers have also focused on alternative legislative strategies. Fox Business’ Eleanor Terrett revealed via X, “A Democratic staffer familiar with the thinking of House leadership told me they don’t expect many Democrats to change their votes on Wednesday. They see a better path to overcoming SAB 121 through HR 5741 – Uniform Treatment for Custodial Assets Act – a bipartisan bill introduced by U.S. Rep. Mike Flood and co-sponsored by Rep. French Hill, Wiley Nickel and Ritchie Torres that addresses the accounting treatment of digital assets.”
Additionally, the House Appropriations Committee proposed a policy rider in its budget bill that would prevent the SEC from using funds to implement SAB 121, illustrating another approach to changing the regulatory environment for cryptocurrency custody.
At press time, Bitcoin was trading at $57,371.
Featured image of Pew Research Center chart from TradingView.com
