Next week, the U.S. House will vote on overturning President Biden’s veto of the crypto-related Staff Accounting Bulletin 121 (SAB 121). This rule requires crypto custodians to list client assets as liabilities, causing concern in the industry. House Majority Leader Steve Scalise indicated the vote might happen on Tuesday or Wednesday. This move is a constitutional obligation following the president’s veto.
Previously, the measure passed the House with a 228-182 vote and the Senate with a 60-38 vote, showing bipartisan support. However, overturning a veto demands a two-thirds majority in both chambers, making this a challenging endeavor. The crypto industry has been vocal about its concerns, arguing that SAB 121 could hinder banks’ ability to safeguard digital assets and stifle innovation.
The resolution to overturn the veto has seen support from both sides of the aisle. In May, Senate Majority Leader Chuck Schumer backed the measure. Despite this, achieving the necessary 290 votes in the House, 60 more than the initial tally, remains difficult. Cody Carbone from the Chamber of Digital Commerce expressed doubts about changing enough minds to reach this threshold. He emphasized the difficulty of convincing 60 members within a week, highlighting the challenges ahead.
Alexander Grieve from venture capital firm Paradigm pointed out the previous bipartisan support for the FIT21 crypto market structure bill, suggesting there is potential for success. However, the industry remains realistic about the steep hill to climb.
The outcome of the vote has significant implications for the crypto industry. If the veto is overturned, it could ease concerns about banks’ ability to safeguard digital assets. Conversely, if it stands, firms may face challenges complying with SAB 121. Supporters of overturning the veto emphasize the importance of flexibility for financial institutions, arguing that SAB 121 imposes undue burdens on firms holding crypto assets.
In conclusion, the upcoming vote is crucial for determining the regulatory landscape for crypto. The crypto industry remains hopeful but realistic about the chances of overturning the veto. The focus now is on rallying additional support in the House to reach the necessary two-thirds majority.
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