Bipartisan Win: Senate Passes First Standalone Crypto Legislation Amid Veto Concerns
Summary:
On May 16, 2024, the U.S. Senate passed the Congressional Review Act (CRA) to reconsider the SEC's Staff Accounting Bulletin No. 121 (SAB 121). H.J.Res. 109, known as the "standalone crypto legislation,” received an unprecedented level of bipartisan support. Despite this support, President Biden had previously hinted at a veto if attempts were made to overturn SEC policy. The subsequent decision now lies in the hands of the current administration, factoring in internal party disputes, the nearing U.S. elections, and the rising cryptocurrency sentiment across different sectors. It remains to be seen whether Bident will maintain his threat to enact a veto or whether an alternate solution will emerge, such as the SEC revoking SAB 121.
The United States Senate on May 16, 2024, passed the Congressional Review Act (CRA) with a significant majority to reconsider the Securities and Exchange Commission (SEC) Staff Accounting Bulletin No. 121 (SAB 121). H.J.Res. 109 obtained 60 votes for and 38 against, reflecting an unusual voting outcome in the U.S. Congress. The record-breaking backing for H.J.Res. 109 was largely bipartisan, with Democrats taking a slight edge 51-49. Senator Cynthia Lummis pointed out that this occasion marked a unique precedent as it is the first “standalone crypto legislation” to get approval from a congressional session.
Before the voting took place, President Biden had hinted at employing his executive authority to veto any effort to repeal SEC policy. The White House expressed strong opposition to any attempts by the House of Representatives to disrupt the SEC's protective measures for crypto-asset market investors and for shielding the wider finance system.
Considering the unexpected support from Democrats and Presidential candidate Donald Trump’s revelation as pro-crypto, will President Biden still veto the bill? Previous administrations have shown that roughly one-third of threatened vetoes remained just threats, signaling that a veto isn’t necessarily a guarantee.
Digital Chamber Founder and CEO, Perianne Boring pointed out the significance of the Senate's robust backing of H.J.Res. 109. She emphasized the remarkable support from 21 Democratic Senators that previously disagreed with SAB 121, ending with 12 Democrat votes. She notably mentions the support from Chuck Schumer, the Senate majority leader and second most powerful individual in the nation, second only to President Biden.
Boring, a previous congressional staff member and television anchor, said the backing from Democrats could prove to be a turning point for the Biden administration. Schumer’s support, she noted, could cause the White House to reconsider its stance and approach. She interpreted this shift as a favourable sign of changing attitudes towards cryptocurrency in Washington.
Other than political pressure, the Biden administration may also face urges from the crypto community and the American Bankers Association, both of whom wish for President Biden to sign H.J.Res. 109 into law. It appears that banks are also looking forward to offering custody services for cryptocurrencies, aiming to profit from the ongoing retail crypto adoption.
Following the overwhelming support for H.J.Res. 109, President Biden is now faced with a complicated decision. Apart from taking potential internal party conflicts into consideration, he must weigh the importance of SAB 121 to the SEC in the nearing U.S. elections. It is a delicate decision requiring serious consideration from all perspectives.
Patrick Kirby, policy lead for the Crypto Council for Innovation, elaborated that the President has a ten-day window to either sign or veto the resolution or simply let it transform into law without his signature. Biden also reserves the "pocket veto" option wherein the resolution doesn't become law due to the absence of Congress to receive the signed or vetoed bill.
Even though the former President, Donald Trump, has lately declared support for crypto regulations, the final decision rests in President Biden's hands. If Biden decides to veto H. J. Res. 109, the Congress could attempt to overturn it, but it would require a two-thirds majority.
Alternatively, the dilemma of whether to act on the veto threat could be resolved if the SEC decides to revoke SAB 121. If this were to take place, Biden would no longer need to decide whether to veto the law or not, thereby avoiding potential internal political conflict. It might be worthy to mention that SAB 121, which requires companies to report crypto assets as both assets and liabilities, has faced criticism within the SEC itself. Commissioner Hester Pierce recently voiced her concern over the measure's efficacy.
Kirby believes that the vote signifies a victory for consumers desiring to safely custody their digital assets, for financial innovation, and signals that crucial policy changes should undergo proper legislative and regulatory processes. Thus, the next move evidently lies with Biden and the SEC.
Published At
5/18/2024 5:48:20 AM
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