All Republicans and a handful of Democrats have voted to overturn SAB 121 – but President Biden has already promised to squash their efforts.
The United States Senate passed a resolution on Tuesday to scrap a de facto ban preventing the nation’s banks from offering crypto custody services.
The vote drew cautious optimism from Bitcoin’s most fervent supporters online and in Congress, who are still wary of a likely veto by the presidential office.
Will Crypto Banking Be Possible In The US?
As voted on Thursday afternoon, H.J.Res.109 certifies congressional disapproval of Staff Accounting Bulletin 121 (SAB 121), which was published by the Securities and Exchange Commission (SEC) two years ago.
The bulletin provides accounting guidance for publicly traded banks aiming to provide services safeguarding their customers’ crypto assets.
Critics of SAB 121 call it a “rule” merely disguised as “guidance” which makes it extremely cost-prohibitive and impractical to actually offer such services. House Rep Tom Emmer (R-Minn), for example, called the bulletin one of SEC chair Gensler’s “egregious attempts to expand SEC authority,” and a sign of his “clear bias toward the digital asset ecosystem.”
The resolution passed through the House of Representatives last week with 55% of votes in favor. Thursday’s senate vote was a more lopsided 60/38 split, with all Republicans voting in favor alongside 11 Democrats.
Getting Past Biden
Neither the House nor Senate votes scored a strong enough majority to overturn a veto, however – something President Joe Biden has already promised to do if and when it reaches his desk.
However, some are optimistic that Thursday’s result could make the administration change its mind. Many influential senators defected from party lines on the vote, such as Democratic caucus leader Chuck Schumer (D-NY).
“The bigger impact of this vote is on the agencies’ behavior,” tweeted Custodia Bank CEO Caitlin Long on Thursday, referring to the SEC’s crypto-hostile enforcement actions over the past year.
“This gives the people within the agencies who HATE what they’re doing the political backing to push back hard,” Long continued. “[Elizabeth Warren] will probably try to crack down even harder but she’s past her peak.”
Elizabeth Warren presented arguments on Thursday in support of SAB 121 and the SEC, claiming the bulletin merely advises banks to provide sensible disclosures about risks related to crypto custody.
The resolution marks the first-ever piece of purely crypto-focused legislation passed through both chambers of Congress.