House Wants to Overturn Biden’s SAB 121 Veto of Crypto Custody Standards

Key Points:

• The U.S. House of Representatives will vote next week to overturn President Biden’s SAB 121 veto, which mandates cryptocurrency custody firms to list customer holdings as liabilities.
• Bipartisan support initially saw the House and Senate pass resolutions against the SAB 121 veto, but a two-thirds majority is required to overturn it.

Next week, the U.S. House of Representatives is set to revisit a critical decision regarding cryptocurrency regulations.

House to Vote on Overturning SAB 121 Veto

They will vote on overturning President Joe Biden‘s veto of Staff Accounting Bulletin 121 (SAB 121), which mandates that firms recording cryptocurrencies held for customers must list them as liabilities on their balance sheets.

Initially issued in 2022, SAB 121 has been a contentious topic within the crypto industry, sparking concerns about its potential impact on digital asset protection by banks. Despite bipartisan support earlier this year, including a 228-182 House vote and a 60-38 Senate vote in favor of overturning the SAB 121 veto, the effort requires a two-thirds majority in both chambers to succeed.

House Majority Leader Steve Scalise has slated the vote for Tuesday or Wednesday, underscoring its constitutional significance. Alexander Grieve from venture capital firm Paradigm acknowledged the challenge but noted the prior bipartisan support for initiatives like the FIT 21 crypto market structure bill.

Impact on Industry Growth and Digital Asset Security

The upcoming decision holds significant implications for the regulatory landscape of cryptocurrencies. If successful, overturning the SAB 121 veto could alleviate fears surrounding digital asset security among financial institutions. Conversely, if the veto stands, firms will need to navigate compliance with SAB 121, potentially impacting innovation and industry growth.

The crypto community remains cautiously optimistic about the outcome, recognizing the uphill battle ahead in garnering additional support within the House. Cody Carbone of the Chamber of Digital Commerce said that the difficulty in changing minds swiftly but emphasized ongoing efforts for consumer protection and governance.