Just moments before President Joe Biden exercised his veto power to reject the repeal of Staff Accounting Bulletin (SAB) 121 on May 31, the American Bankers Association (ABA), the leading lobbying organization for the U.S. banking sector, made a final attempt to persuade him otherwise.
In a letter addressed to President Biden, the ABA emphasized the negative impact of preventing regulated banks from effectively providing digital asset safeguarding services on a large scale. The organization argued that such limitations would harm investors, customers, and ultimately, the financial system.
Despite both the House of Representatives and the Senate voting in favor of repealing the SAB 121 guidance, President Biden utilized his presidential veto authority, ensuring that the guidance would not be overturned.
The ABA highlighted that SAB 121 represents a significant departure from the traditional treatment of custodial assets and could pose challenges for the industry in terms of securely storing digital assets for customers. This unexpected pro-crypto stance from the ABA may come as a surprise to those in the cryptocurrency industry, especially considering reports from last year that indicated the ABA had assisted Senator Elizabeth Warren, known for her skepticism towards cryptocurrencies, in drafting anti-crypto legislation.
In a video that emerged on X (formerly Twitter) in December 2023, it was revealed that Senator Roger Marshall and Elizabeth Warren had sought the ABA’s assistance in crafting the Digital Asset Anti-Money Laundering Act.
The rejection of the SAB 121 repeal by President Biden, along with the ABA’s support for digital asset safeguarding services, further highlights the growing influence of crypto voters in the political landscape. This trend is expected to continue and shape the upcoming 2024 election.