A significant crypto legislation vote is on the agenda for the US House of Representatives on Wednesday, July 10. This vote carries the possibility of overriding President Joe Biden’s veto of the Securities and Exchange Commission’s (SEC) resolution to repeal Staff Accounting Bulletin 121 (SAB 121), which has generated a lot of interest due to its implications on how financial institutions hold Bitcoin and other digital assets.
The implementation of SAB 121 by the SEC in 2022 requires banks holding cryptocurrency to report these assets as liabilities on their financial statements. Many in the crypto sector have criticized this regulation, arguing that it discourages banks and other institutional players from engaging with digital assets due to the added compliance burden.
Decisive Moment for Crypto Industry
In an initial move, the House passed a resolution against SAB 121 in early May with a vote of 228-182, gaining support from 21 Democrats and unanimous Republican endorsement. Despite President Biden’s veto, a vote has been scheduled to override it, needing a two-thirds majority in both the House and Senate for approval.
Ron Hammond of the Blockchain Association highlighted the unique political dynamics in this situation and observed that “crypto has become a focal point in political campaigns.” He emphasized the bipartisan nature of previous votes and acknowledged the challenging path ahead, stating, “this endeavor faces a steep uphill battle as only 21 Democrats joined all Republicans in support back in May (well below the required 2/3 majority).”
Perianne Boring from the Digital Chamber emphasized the need for more Democratic backing, stressing, “The vote to nullify SAB 121 is back on the House agenda this week after the President’s veto on May 31st. A two-thirds majority is needed for this constitutionally mandated vote to override the veto. We require approximately 60 more House Democrats to support our initiative to terminate SAB 121.”
Exploring Alternatives
In response to the hurdles in overturning the veto, lawmakers have been discussing alternative legislative strategies. Eleanor Terrett of Fox Business shared insights revealing that the focus is now shifting towards HR 5741 – Uniform Treatment for Custodial Assets Act, a bipartisan bill introduced by US Rep Mike Flood and cosponsored by Rep French Hill, Wiley Nickel, and Ritchie Torres as a more promising approach in circumventing SAB 121.
Moreover, the House Appropriations Committee has proposed a policy rider in its budget bill to prevent the SEC from utilizing funds to enforce SAB 121, indicating another avenue to alter the regulatory landscape concerning cryptocurrency custody.
As of the latest update, Bitcoin was trading at $57,371.
