US President Joe Biden’s decision, according to the American Bankers Association, will “harm investors, customers, and ultimately the financial system.” Shortly before US President Joe Biden vetoed the repeal of Staff Accounting Bulletin (SAB) 121 on May 31, the American Bankers Association (ABA), the biggest lobbying group for the country’s banking sector, sent a letter attempting to influence his decision.
Just before Biden announced his decision to veto the Congressional resolution aimed at repealing the U.S. Securities and Exchange Commission (SEC) SAB 121 guidelines, the ABA wrote a letter to him on May 31 stating that “precluding regulated banking organisations from effectively providing digital asset safeguarding services at scale harms investors, customers, and ultimately the financial system.”(o) Despite a vote in favour of eliminating the SAB 121 recommendation in both the House of Representatives and the Senate, Biden chose to exercise his presidential veto power, keeping the advisory in place.
According to the lobbying group, the SAB 121 represents a significant departure from the standard handling of custodial assets and may make it more difficult for businesses to protect clients’ digital assets.
“The industry’s ability to provide its customers with safe and sound custody of digital assets is threatened by the SAB 121, which represents a significant departure from longstanding accounting treatment for custodial assets,” the ABA stated. “Restricting banks’ capacity to provide these services exposes consumers to higher risk by providing them with fewer reliable, regulated options for protecting their digital asset portfolios,” the statement continued.
The ABA’s pro-crypto stance may come as a surprise to some in the sector, especially in light of claims that the organisation assisted Senator Elizabeth Warren—who is well-known for her scepticism towards cryptocurrency—in the crafting of anti-crypto legislation as recently as last year.
Following a video that went viral on X (formerly Twitter) in December 2023, Roger Marshall acknowledged that he and Elizabeth Warren had approached the American Bar Association (ABA) to seek help in creating the Digital Asset Anti-Money Laundering Act. “We went to the American Bankers Association and said, ‘Help us craft this,'” Marshall said as the first action taken.