Deadline for Biden to Veto SAB 121

H.J. Res 109, the resolution to repeal SAB 121, was passed in the Senate last week with a 60 to 38 vote. The measure received support from 11 Democrats, 1 Independent, and 48 Republicans.

The resolution aims to overturn the SEC's rule requiring banks to report customer-owned digital currencies as assets on balance sheets. This initiative has faced significant opposition from both the banking and cryptocurrency industries.

The bill, proposed by House Majority Whip Rep. Tom Emmer (R-Minn.), focuses on financial privacy and aims to curb government overreach through monetary transactions. After the Senate vote, the resolution was later transmitted to President Biden.

This delay altered the standard ten-day veto period to June 3rd. The timing is critical as it occurs during the congressional recess, affecting the possibility of a pocket veto and giving the President ample time to decide while Congress is in its pro-forma sessions.

Presidential Decision Awaits

President Biden now has three options regarding the Joint Resolution: He can approve it and sign it into law, reject it and veto it, or do nothing, allowing it to become law.

Initially, on May 8th, President Biden threatened a veto in the Statement of Administration Policy, citing concerns about financial regulation and supervision.

However, the precedents of previous veto threats show that initial threats do not necessarily lead to an actual veto. The outcomes can vary, leaving the door open for different possibilities.

Critics argue that the SEC's rule would frustrate innovation and encroach on personal business by regulating personal finances.

Industry Reaction and Regulatory Context

The Senate's move to repeal SAB 121 has received backing from the cryptocurrency industry. Ripple's Chief Legal Officer, Stuart Alderoty, considered the repeal a victory against overregulation.

SEC Commissioner Hester Peirce, often called "Crypto Mom," also expressed concerns about the SEC's stance on digital asset regulation.

Michael Saylor, the CEO of MicroStrategy, welcomed the Senate's decision. He stressed the importance of defending the rights of digital currency holders and avoiding excessive regulation that could undermine the U.S.'s standing in the global financial industry.

Amid this tension, Senator Cynthia Lummis restated the growing support for crypto assets in Congress following the Senate's decision to repeal SAB 121 and the passage of FIT 21.

"The resolution aims to overturn the SEC's rule requiring banks to report customer-owned digital currencies as their assets on balance sheets."

The increasing Congressional backing for cryptocurrency highlights a shifting landscape in financial regulation. With key figures in the industry advocating for less stringent rules, the debate over balancing innovation with regulation continues.

As President Biden's decision deadline approaches, the outcome will likely have significant implications for the future of cryptocurrency regulation in the United States.