President Joe Biden has ten days to decide on H.J.Res.109 seeks to overturn the SEC's crypto rule, which would impact financial institutions that deal with cryptocurrency startups.

Despite House Approval, Biden's Potential Veto of Pro-Crypto Bill H.J.Res.109 Casts Uncertainty on Industry

Many House of Representatives members welcomed this week's passing of two pro-crypto initiatives. Still, the looming possibility of President Joe Biden vetoing one of the bills, which could significantly impact the cryptocurrency industry, has cast a shadow over the industry proponents' celebrations.

According to legislative documents (via Cointelegraph), on May 23, the House presented to the U.S. President a joint resolution calling on the Securities and Exchange Commission (SEC) to overturn a rule impacting financial institutions that do business with cryptocurrency startups. The bill, H.J.Res.109, would repeal the SEC's Staff Accounting Bulletin (SAB) No. 121, which requires banks to record clients' cryptocurrency on their balance sheets and retain capital against it.

Before the House and Senate passed the resolution, President Biden stated on May 8 that he would veto it. He noted that the proposal would "inappropriately constrain the SEC's ability to ensure appropriate guardrails and address future issues related to crypto-assets" while limiting regulatory rules for digital assets.

However, within about two weeks, the political situation changed slightly. Based on recent events in Congress, it was still being determined whether President Biden would veto or sign it into law.

Bipartisan Support for H.J.Res.109 Signals Potential Shift in Crypto Regulation Stance as Biden's Decision Looms

On May 8, 21 Democrats in the House, in a surprising show of unity, voted with Republicans to approve H.J.Res.109. This was followed by a significant bipartisan result on May 16, when the resolution passed with a 60-38 vote in the Senate, indicating a potential shift in political stance towards cryptocurrency regulation.

Before the House voted on the Financial Innovation and Technology for the 21st Century (FIT21) Act, the White House issued a statement in which President Biden opposed the bill but did not outright threaten to veto it. More than 70 Democrats voted with a majority of Republicans to adopt the legislation, which will be sent to the Senate soon.

"HJ 109 and its bipartisan support are a clear rebuke of the SEC's vision for crypto oversight," Moe Vela, a former Director of Administration for then-Vice President Biden, told Cointelegraph. "I highly encourage the Biden Administration to collaborate with the crypto industry in the development of consumer-friendly AND industry-supportive regulations and policies."

"I cannot predict whether the President will veto HJ 109, but I highly encourage him not to do so," Vela added.

Proponents of cryptocurrency will know President Biden's decision within ten days, excluding Sundays, which is the maximum amount of time allowed to sign or veto legislation. The legislation arrived on his desk the same day the SEC cleared spot Ethereum exchange-traded funds for listing and trading on US exchanges for the first time.

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