Washington, D.C. – President Joe Biden vetoed a bipartisan resolution on Friday that aimed to reverse a Security and Exchange Commission policy criticized for discouraging banks from offering crypto custody services. In a notice from the White House, Biden expressed concerns that overturning the SEC’s decision could undermine the agency’s broader authorities in regulating accounting practices and potentially harm consumers and investors.
The resolution in question revolved around Staff Accounting Bulletin (SAB) 121, a separate issue from the FIT21 Act, which has been the center of debate for over a year. Despite bipartisan support in the U.S. House of Representatives, the resolution faced Biden’s veto after passing 228-182. The Senate also voted against the policy, with 12 Democrats joining Republicans in a 60 to 38 vote to repeal it.
In his veto notice, President Biden criticized the resolution for relying on the Congressional Review Act as the basis for legislative oversight. He argued that the bill would limit the SEC’s ability to establish necessary guidelines and address future challenges in the crypto market. Biden emphasized the importance of maintaining a comprehensive regulatory framework for crypto-assets to prevent financial instability and market uncertainty.
While Biden opposed the FIT21 Act, which aims to establish a federal regulatory framework for digital assets, he expressed willingness to collaborate with Congress on a balanced regulatory approach for cryptocurrencies. The divisive nature of the issue was evident in the House’s passing of the FIT21 Act, with support from both Democrats and Republicans crossing party lines.
The timing of Biden’s veto coincides with former President Donald Trump’s legal troubles and his appeal to the crypto community as a part of his political strategy for the upcoming presidential election. The intersection of crypto policy and political dynamics highlights the evolving landscape of digital currencies as a significant campaign issue.
Overall, Biden’s veto reflects the complexity of regulating cryptocurrencies in a rapidly changing financial landscape, where policymakers must balance innovation with investor protection and market stability. The ongoing discussions surrounding crypto regulation underscore the challenges of navigating emerging technologies within traditional regulatory frameworks.