President Joe Biden has decided to veto a bill aimed at overturning the Securities and Exchange Commission’s (SEC) Staff Accounting Bulletin 121 (SAB 121), despite pressure from lawmakers.

In May, both the House and Senate voted to repeal SAB 121, a controversial SEC bulletin. The House passed the repeal with a 228-182 vote, mostly backed by Republicans, although 21 Democrats also supported it. The Senate followed with a 60-38 vote, including support from several Democrats, such as Senate Majority Leader Chuck Schumer.

On May 31, President Biden addressed the U.S. House of Representatives, stating, "My Administration will not support measures that jeopardize the well-being of consumers and investors. Necessary safeguards are crucial to harness the potential benefits and opportunities of crypto-asset innovation."

Biden's statement indicates that his administration is determined to maintain strict SEC regulations over cryptocurrencies. The White House further explained that restricting the SEC’s ability to manage a comprehensive and effective financial regulatory framework for crypto-assets could lead to significant financial instability and market uncertainty.

SAB 121 has faced criticism over the past year, especially from the crypto industry. Critics argue that the bulletin would hinder banks from providing crypto custodial services by requiring them to record customers' crypto holdings as liabilities on their balance sheets. However, the SEC has defended SAB 121 as "non-binding staff guidance" that enhances customer disclosures.

To overturn Biden's veto, a two-thirds majority vote is needed in both the House and Senate. While the veto might not gain Biden any new supporters, it could potentially cost him votes in key states like Wisconsin, Michigan, Pennsylvania, Arizona, and Nevada.

Reacting to the White House's decision to keep SAB 121, Ripple CEO Brad Garlinghouse expressed disappointment, stating, "To say that this is incredibly disappointing from this White House – at an incredibly pivotal time – is an understatement."

In summary, President Biden's veto of the SAB 121 repeal bill underscores his administration's commitment to maintaining robust crypto regulations to protect consumers and investors. The debate over this regulation highlights the ongoing tensions between regulatory bodies and the evolving crypto industry.