TLDR
- The US House may vote next week to overturn President Biden’s veto of a resolution to nullify SAB 121.
- SAB 121 requires firms custodying cryptocurrencies to record customer holdings as liabilities on their balance sheets.
- The vote needs a two-thirds majority in both the House and Senate to override the veto.
- Other key events this week include the release of US CPI and PPI data, and testimony from Fed Chair Jerome Powell.
- There’s also a Democratic crypto roundtable planned with industry leaders like Mark Cuban.
The US House of Representatives is set to vote next week on overturning President Joe Biden’s veto of a resolution that would nullify a controversial cryptocurrency accounting rule.
The vote, expected on Tuesday or Wednesday, focuses on Staff Accounting Bulletin 121 (SAB 121), a guideline issued by the Securities and Exchange Commission (SEC) in March 2022.
SAB 121 requires companies that custody cryptocurrencies for customers to record those digital assets as both assets and liabilities on their balance sheets.
This accounting method has drawn criticism from the crypto industry and some lawmakers who argue it could discourage banks and other financial institutions from offering crypto custody services.
The House and Senate previously passed a resolution to overturn SAB 121 in May, with bipartisan support in both chambers. The House voted 228-182 in favor, while the Senate approved it 60-38.
However, President Biden vetoed the resolution later that month, arguing that SAB 121 provides important protections for investors and the financial system.
To override the President’s veto, both the House and Senate would need to pass the resolution again with a two-thirds majority.
This presents a significant challenge, as it would require more support than the initial votes received, particularly from Democratic lawmakers.
The vote on SAB 121 comes amid a busy week for crypto-related policy and economic events. The US is set to release Consumer Price Index (CPI) and Producer Price Index (PPI) data for June, which could influence discussions about inflation and monetary policy.
Federal Reserve Chair Jerome Powell is also scheduled to testify before the House Financial Services Committee on monetary policy.
The Senate Agriculture Committee will hold a hearing on oversight of digital commodities, featuring testimony from Commodity Futures Trading Commission (CFTC) Chairman Rostin Behnam. This hearing could provide insights into how regulators are approaching the rapidly evolving crypto market.
On the political front, Representative Ro Khanna is organizing a Democratic crypto roundtable with industry leaders, including billionaire Mark Cuban.
This event aims to develop a cohesive strategy for addressing cryptocurrency issues and potentially countering Republican narratives on crypto policy.
The increased attention to crypto-related issues from both major political parties reflects the growing importance of digital assets in the broader economic and policy landscape.
As the 2024 presidential election approaches, both Biden and Republican candidate Donald Trump have shown more interest in crypto topics, which some industry observers see as a positive development.
As the House prepares to vote on overriding the SAB 121 veto, the crypto industry will be watching closely. The outcome could have significant implications for how financial institutions handle digital assets and shape the regulatory landscape for cryptocurrencies in the United States.
