Industry leaders and policymakers are considering a possible U.S. government shutdown.
The U.S. House of Representatives has rejected a Senate-passed government funding bill, and Speaker Kevin McCarthy's proposals have failed to resonate with right-wing lawmakers in the House — all signs that the U.S. government is taking the lead. At least a partial closure starting Oct. 1.
A shutdown of the U.S. government, which occurs when Congress fails to pass funding legislation for the next fiscal year, stops all federal agencies and departments from doing anything deemed “non-essential.” Although the shutdown will only last for a few hours — one day less than one day in February 2018 — once activity resumes, crypto bills may take a backseat to other policies among lawmakers.
Accounts for digital assets, both good and bad, stand in for closure, and financial regulators, including the Securities and Exchange Commission and Commodity Futures Trading Commission, operate on skeleton staff. Following the 2019 shutdown, Cointelegraph reported that SEC officials had limited enforcement and oversight capabilities.
“After the shutdown, it's unclear which issues will come up on the priority list in terms of gathering congressional interest,” Sheila Warren, CEO of the Crypto Council for Innovation, told Cointelegraph. “In addition to funding the government, Congress faces several legislative deadlines that require additional legislative action before the end of the year.”
In July, lawmakers from the House Financial Services Committee passed the Financial Innovation and Technology for the 21st Century Act (FIT), the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act, and the Save Your Coins Act. If a shutdown occurs, no action can be taken on these crypto-specific accounts – no updates, no floor votes.
Warren noted that congressional priorities could easily shift from crypto to any number of issues that arise during the shutdown, and there could be additional concerns as the 2024 elections approach. In a speech on September 29, Treasury Secretary Janet Yellen opposed the shutdown, saying it was “dangerous and unnecessary” and could cause “economic headwinds” in the future.
If we have a government shutdown, many important jobs in science and health could be affected – from cancer research to food safety.
The American people need House Republicans to do their job: fund the government.
— Joe Biden (@JoeBiden) September 28, 2023
Related: US Government Shutdown Looming – 5 Things to Know in Bitcoin This Week
Before any bills were introduced in the House, several Democratic members of the House Financial Services Committee strongly criticized Republicans at a Sept. 27 hearing, even though the focus was intended to be on SEC oversight. Virginia Rep. Don Beyer was one of the few Democrats pushing a crypto-related bill amid concerns over government funding, but lawmakers have no chance to tackle the bill before October 1.
“It seems that the possibility of closing the broken house is increasing from time to time [Republican] Divisions and the Senate will go their separate ways,” said Ron Hammond, director of government relations for the Blockchain Association, in a Sept. 25 X thread. “As the shutdown continues for crypto, many different bills will be pushed, including the FIT/market structure and settlements.”
At the time of publication, the price of Bitcoin (BTC) had dropped below $27,000, but it did not appear to be related to news of the congressional spending bills or the SEC moving ahead of schedule to delay decisions on the spot Bitcoin exchange-traded funds. In contrast, the price of Ether (ETH) has moved above the $1,600 level in the past three days.
Magazine: The U.S. Government Broke My $250K Bitcoin Price Prediction: Tim Draper, Hall of Flame
