Congress recently passed H.J.Res.109 with rare bipartisan support, seeking to repeal the SEC’s Staff Accounting Bulletin No. 121 (SAB 121) regarding the recording of customer crypto assets by banks. This move would facilitate business transactions with the crypto industry. Despite Congress’ backing, President Biden vetoed the repeal, citing consumer and investor well-being as his priority.
Blockchain Association CEO Kristin Smith suggested that Biden’s stance may be at odds with the prevailing sentiment in Congress and among the public. The question arises: what avenues are available to Congress and the crypto industry in the face of such strong support?
While Biden’s veto poses a challenge, Congress has the power to override it if a two-thirds majority is achieved in both the House of Representatives and the Senate. This requires 290 votes in the House and 66 in the Senate, with the current composition being a mix of Republicans and Democrats.
Despite the bipartisan nature of the crypto industry, the road to repealing SAB 121 is not without obstacles. However, recent bipartisan efforts such as the FIT21 Act showcase the potential for cooperation in the digital asset realm. Overturning presidential vetoes is not unprecedented in Congress, and options like the Stablecoin Act offer alternative routes for the industry.
Industry experts suggest that the upcoming presidential elections and the wavering support for crypto among lawmakers may dissuade representatives from challenging Biden’s veto directly. Instead, the Lummis-Gillibrand Payment Stablecoin Act could be a strategic move to address the concerns raised by SAB 121 without the need for a contentious veto override.
Pro-crypto lobbies are also stepping up their efforts to influence lawmakers and sway opinions. Coinbase’s significant donation to Fairshake, a PAC supporting crypto-friendly candidates, underscores the industry’s commitment to advocating for favorable regulations. The involvement of banking lobbies further signals a united front in pushing for changes in crypto legislation.
Ultimately, the crypto industry and its allies are exploring various avenues to navigate the complex political landscape and secure a favorable outcome in the face of opposition. The potential for bipartisan cooperation and strategic lobbying efforts may hold the key to achieving their goals without jeopardizing the delicate balance of political dynamics leading up to the elections.