In a dramatic move, just hours before President Joe Biden vetoed the repeal of the Staff Accounting Bulletin (SAB) 121 on May 31, the American Bankers Association (ABA) made a final attempt to influence his decision. The ABA, the largest lobbying organization for the U.S. banking industry, argued that Biden's decision would harm investors, customers, and the financial system.

The ABA's letter to Biden contended that preventing regulated banking organizations from effectively providing digital asset safeguarding services at scale would be detrimental. "Precluding regulated banking organizations from effectively providing digital asset safeguarding services at scale harms investors, customers, and ultimately the financial system," the ABA wrote.

Despite both the House of Representatives and the Senate voting to repeal the SAB 121 guidance, Biden opted to use his veto power, keeping the guidelines in place. The ABA explained that SAB 121 represents a significant departure from the traditional accounting treatment for custodial assets, potentially complicating the industry's ability to safely manage digital assets for customers. They stressed that limiting banks' ability to offer these services would leave customers with fewer well-regulated, trusted options, increasing their exposure to risk.

For some in the crypto industry, the ABA's pro-crypto statement is surprising. Just last year, reports surfaced of the ABA assisting Senator Elizabeth Warren, known for her skepticism towards crypto, in drafting anti-crypto legislation. In December 2023, Cointelegraph reported on a video where Senator Roger Marshall admitted that he and Warren sought the ABA's help in crafting the Digital Asset Anti-Money Laundering Act. "The first thing that we did is that we went to the American Bankers Association and said 'help us craft this,'" Marshall stated.

The ABA's failed bid to influence Biden highlights the ongoing debate over digital asset regulation and the future role of the banking industry in this evolving landscape.