The regulation of the crypto market remains a contentious issue, highlighted by U.S. President Joe Biden’s recent veto of the repeal of Staff Accounting Bulletin (SAB) 121. Just hours before the veto decision on May 31, the American Bankers Association (ABA) sent a letter attempting to sway the outcome.
Why the ABA Intervened?
In their letter, the ABA expressed concerns that preventing regulated banks from offering large-scale crypto asset custody services would ultimately harm investors, customers, and the broader financial system. They emphasized that the repeal of SAB 121 could jeopardize the safe custody of digital assets.
SEC’s Stance and Legislative Opinions
The U.S. Securities and Exchange Commission (SEC) decided to repeal SAB 121 guidelines, which had garnered support from both the House of Representatives and the Senate. However, Biden exercised his presidential veto to block this move. The ABA contended that SAB 121 deviates significantly from traditional custodial asset practices, potentially leaving customers with few reliable options.
The ABA’s pro-crypto stance may come as a surprise to some, considering the group’s previous involvement with Senator Elizabeth Warren in drafting anti-crypto legislation. In a video from December 2023, Senator Roger Marshall revealed they sought the ABA’s assistance in creating the Crypto Asset Anti-Money Laundering Act.
User-Usable Inferences
- Biden’s veto indicates a cautious approach towards crypto regulation.
- The ABA believes that the repeal of SAB 121 could expose investors to increased risks.
- There is a nuanced stance within the ABA regarding cryptocurrency regulation.
- The legislative process around crypto regulation is highly dynamic and involves various stakeholders.
The debate surrounding SAB 121 illustrates the complex and evolving landscape of crypto regulation in the U.S. While the ABA’s recent actions suggest a shift towards supporting crypto services, the ultimate outcome remains uncertain amidst regulatory and political scrutiny.