Regulation
US House to Vote to Override Biden’s Veto on Crypto Accounting SAB 121
Summary
- The U.S. House of Representatives may vote this week to override President Biden’s veto of a bill that would eliminate the SEC’s Staff Accounting Bulletin (SAB) 121.
- SAB 121 requires companies to label digital assets held for customers as liabilities on their balance sheets.
- The original bill to limit SAB 121 passed the House by a vote of 228 to 182 and the Senate by a vote of 60 to 38.
- To override a presidential veto, a two-thirds majority in both the House and the Senate is required.
- Other notable events this week include the release of U.S. CPI and PPI data and Federal Reserve Chairman Jerome Powell’s testimony before the House Financial Services Committee.
The United States House of Representatives is gearing up for a crucial vote this week that could have significant implications for the cryptocurrency industry.
The House is poised to decide whether to override President Joe Biden’s veto of a bill that would eliminate Securities and Exchange Commission (SEC) Accounting Bulletin (SAB) 121.
SAB 121, issued by the SEC in March 2022, has been a point of contention in the cryptocurrency industry. The bulletin requires some firms, particularly those offering cryptocurrency custody services, to record digital assets held for customers as liabilities on their balance sheets. This accounting practice has raised concerns in the industry, with many arguing that it could discourage banks and other financial institutions from offering cryptocurrency custody services.
The original bill to limit SAB 121 passed both houses of Congress with bipartisan support. The House passed it by a vote of 228-182, while the Senate passed it by a vote of 60-38.
However, President Biden vetoed the bill in Maysaying that removing the SEC’s guidelines would hinder the regulator’s ability to implement safeguards and protect investors.
The House is now preparing to vote to override this veto.
According to House Majority Leader Steve Scalise’s weekly schedule, the vote could happen as early as Tuesday or Wednesday. However, overturning a presidential veto is no small feat. It requires a two-thirds majority in both the House and Senate, a significantly higher threshold than the original votes.
Policy experts are divided on the likelihood of a successful override. Alexander Grieve, who runs government affairs at the venture capital firm Paradigm, suggests that it is not impossiblegiven the bipartisan support for cryptocurrency-related bills in recent votes.
However, Cody Carbone, vice president of policy for the Chamber of Digital Commerce, believes that is unlikely, noting that the House would need about 60 more votes than initially available to reach the two-thirds threshold.
This vote comes in a week filled with significant events for the cryptocurrency industry and the economy at large.
- The United States will release data on the Consumer Price Index (CPI) and the Producer Price Index (PPI) for June, which could influence future monetary policy decisions.
- Federal Reserve Chairman Jerome Powell will give his semiannual testimony on monetary policy before the House Financial Services Committee.
- Senate Agriculture Committee hearing on digital commodities oversight, featuring Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam.
- Rep. Ro Khanna is also chairing a Democratic cryptocurrency roundtable with industry leaders, including billionaire Mark Cuban, to develop a strategy to counter potential anti-cryptocurrency policies.
The cryptocurrency market has shown sensitivity to these impending events, with Bitcoin seeing a 5% drop on Sunday and altcoins seeing even steeper correctionsThis volatility underscores the importance of regulatory clarity and economic indicators for the cryptocurrency industry.
The vote on SAB 121 represents a critical moment for cryptocurrency regulation in the United States. If the veto is overturned, it could signal a more accommodating regulatory environment for cryptocurrency custodians. However, if the veto stands, it could harden the SEC’s approach to cryptocurrency accounting practices.