The U.S. House of Representatives failed on Thursday to override President Joe Biden's veto of a bipartisan effort to allow American banks to hold crypto.
The bill would have required a two-thirds supermajority to pass the House, after which it would have required another two-thirds vote of approval in the Senate. While it passed with a healthy majority today, it did not come close to approaching the level of support from Democrats needed to rebuke Biden.
In fact, House members voted today in exactly the same numbers as they did when the bill—a repeal of Securities and Exchange Commission (SEC) rule SAB 121—first came up for a vote in May. Exactly 207 Republicans and 21 Democrats voted for the measure then, and today.
Ultimately, 182 Democrats voted against the repeal in May, while 183 voted against it this morning.
Crypto policy experts were not exactly holding their breath in expecting that the bill could garner enough bipartisan support to override Biden’s veto.
But they’ve been surprised before: In late May, a framework for crypto regulation, FIT 21, passed the House with support from 71 Democrats. On the right day, that number of votes could constitute a supermajority in the chamber.
Before SAB 121 came to a second vote on the House floor on Thursday, it briefly appeared as if private negotiations between the banking lobby and the SEC were poised to score the crypto industry some sort of preemptive victory—though details were murky.
"I understand that the SEC may be close to reaching an agreement on these modifications, which would ensure that well-regulated entities like custody banks can offer crypto custody services consistent with SAB 121," Rep. Maxine Waters (D-CA) said on Wednesday.
Crypto advocates like House Financial Services Committee Chair Rep. Patrick McHenry (R-NC), however, decried any attempts to prevent Congress from having the final word on what the SEC’s crypto policies should be.
“The idea that Congress has got to wait because you have banks trying to get a special carve out for themselves from Gary Gensler and the SEC, that’s not sound public policy,” McHenry said on the House floor Wednesday. “And the idea that Congress is going to wait and pause on overriding the president’s veto of really bad policy that harms consumers, just because of a rumor… that’s not the way a great [nation] state should do business.”
Ultimately, McHenry got his way, despite the vote’s result.
It remains unclear whether the SEC has reached any sort of agreement to alter its policies on American banks holding crypto. Decrypt reached out to the agency but did not immediately receive a response.
Editor's note: This story was updated after publication with additional details.
Edited by Andrew Hayward