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SAT 121 Veto Showdown scheduled for Wednesday
The U.S. House of Representatives is expected to vote on significant cryptocurrency legislation on Wednesday, July 10. This 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 this bill. It has attracted considerable attention due to its impact on the custody of Bitcoin and other cryptocurrencies by financial institutions.
The SEC issued SAB 121 in 2022, requiring 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 added regulatory burden discourages banks and other institutional players from managing digital assets.
The decisive day for cryptocurrencies
The house initially past the resolution opposing SAB 121 passed in early May by a vote of 228-182, supported by 21 Democrats along with unanimous support from Republicans. President Biden vetoed the resolution, however. This prompted 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 highlighted the unusual political dynamics at play, noting that “cryptocurrency has now found itself a campaign issue.” He emphasized the bipartisan nature of previous votes and underscored the uphill battle ahead, saying, “this effort is a steep climb as only 21 Ds in May joined all Rs in support (drastically below the 2/3 threshold needed).”
Perianne Boring of the Digital Chamber added urgency to the discussion, stressing the need for greater democratic support: “The bill to overturn SAB121 is back for a vote in the House this week after POTUS vetoed it on May 31. This constitutionally mandated vote requires a 2/3 majority to override the veto. We need about 60 more House Democrats to support our bill to end SAB 121.”
Other ways
In response to the challenges of overturning the veto, discussions among lawmakers have also included alternative legislative strategies. Fox Business’s Eleanor Terrett revealed via X, “A Democratic staffer familiar with House leaders’ thinking told me they don’t expect many Democrats to change their votes Wednesday. They see a better path to overturning SAB 121 through HR 5741 — the 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 an addendum to 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 from Pew Research Center chart by TradingView.com