The US House of Representatives will reconsider a bill to overturn Securities and Exchange Commission staff accounting bulletin SAB 121, which critics say makes it difficult for crypto companies to work with banks, after President Joe Biden vetoed it in May.
House Majority Leader Steve Scalise has scheduled it for consideration next Tuesday or later.
While the House and Senate both approved the measure with bipartisan votes, a two-thirds majority in both is required to override a veto, which could prove difficult to achieve.
The SEC published SAB 121 in March 2022. It advises any entity safeguarding crypto assets on behalf of others to put them on its balance sheet as if it owned them, DL News reported earlier.
Like other too-big-to-fail banks, custodians must hold capital reserves to offset risky on-balance sheet items so they can fund their positions in the event of a default. That’s expensive: The capital they’re forced to hold in reserve could be leveraged for revenue.
While SAB 121 isn’t clear on how much banks would have to hold against crypto assets, or whether the SEC would even enforce it, the uncertainty alone has reportedly deterred a number of big firms — including BNY Mellon, State Street, and Nasdaq — from entering this business.
When Biden vetoed the bill, he posted a letter on the White House website saying that his administration would not “support measures that jeopardize the well-being of consumers and investors.”
He added that “Appropriate guardrails that protect consumers and investors are necessary to harness the potential benefits and opportunities of crypto-asset innovation.”
Biden is currently dealing with a crisis of his own making after a dismal performance in a debate against former President Donald Trump, with the election about four months away.