Just hours before President Joe Biden‘s decision to veto the repeal of Staff Accounting Bulletin (SAB) 121 on May 31, the American Bankers Association (ABA), a leading lobbying group for the U.S. banking sector, attempted to influence his decision by sending a letter.
The ABA argued against the repeal, stating, “Precluding regulated banking organizations from effectively providing digital asset safeguarding services at scale harms investors, customers, and ultimately the financial system.”
This statement was made in a last-minute plea to the President, coinciding with his announcement to maintain the SEC’s guidelines.
Despite bipartisan support in Congress, with both the House of Representatives and the Senate voting to overturn the SAB 121 guidance, Biden exercised his veto power to uphold the regulations.
This move blocked the congressional attempt to alter how digital assets are managed by financial institutions.
The ABA expressed concerns that SAB 121 marks a drastic shift from traditional practices concerning custodial assets, potentially complicating the safeguarding of digital assets for customers.
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“The SAB 121 represents a significant departure from longstanding accounting treatment for custodial assets and threatens the industry’s ability to provide its customers with safe and sound custody of digital assets,” the ABA elaborated.
They added that restricting banks from offering these services “leaves customers with few well-regulated, trusted options for safeguarding their digital asset portfolios and ultimately exposes them to increased risk.”
This pro-crypto stance from the ABA might come as a surprise to some, especially given the organization’s involvement last year with Senator Elizabeth Warren in drafting legislation perceived as anti-crypto.
Cointelegraph highlighted an incident in December 2023 where Roger Marshall revealed on X (formerly Twitter), “The first thing that we did is that we went to the American Bankers Association and said ‘help us craft this,’” referring to the Digital Asset Anti-Money Laundering Act.
The ABA’s recent actions and statements underscore a complex relationship with digital assets, navigating between regulatory advocacy and supporting broader access to crypto services, reflecting the evolving landscape of digital finance and its regulation.
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