The United States House of Representatives has plunged into a legislative quagmire as it rejected a bill, which had previously passed the Senate, aimed at funding the government. The failure to reach consensus threatens to trigger at least a partial government shutdown, scheduled to commence on October 1st.
The repercussions of such a shutdown are far-reaching, with all nonessential federal agencies and departments grinding to a halt. Cryptocurrency-related bills, which had been making steady progress, would be forced to take a backseat as lawmakers scramble to address the impending crisis.
During a government shutdown, financial regulators such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) would be operating with a skeleton crew. This situation, as previously observed in a 2019 shutdown, severely limits their capabilities for enforcement and oversight within the cryptocurrency industry.
Sheila Warren, CEO of the Crypto Council for Innovation, highlighted the uncertainty surrounding the legislative priorities post-shutdown: “In the aftermath of a shutdown, it is unclear what issues will rise to the top of the priority list in terms of gathering congressional interest.” She pointed out that, in addition to funding the government, Congress faces numerous statutory deadlines requiring legislative action by year-end.
Crypto-focused bills, including the Financial Innovation and Technology for the 21st Century Act (FIT), the Blockchain Regulatory Certainty Act, the Clarity for Payment Stablecoins Act, and the Keep Your Coins Act, would be in limbo during a shutdown. No further action, including amendments or floor votes, could be taken on these critical pieces of legislation.
The looming government shutdown has cast a shadow of uncertainty over the crypto industry’s legislative agenda, with priorities potentially shifting as lawmakers grapple with pressing fiscal issues and the approaching 2024 elections.
Treasury Secretary Janet Yellen has voiced strong opposition to the prospect of a shutdown, deeming it “dangerous and unnecessary,” warning that it could have adverse economic repercussions.
Ron Hammond, the Blockchain Association’s director of government relations, underscored the challenges posed by a divided Congress, stating, “The imminent shutdown highlights just how hard it is to pass any critical legislation in a split Congress.” However, he expressed optimism about the bipartisan support for various crypto bills in the House, suggesting that they may see action in November.
As the deadline approaches and the specter of a government shutdown looms larger, the cryptocurrency community watches closely, while the price of Bitcoin dips and Ether experiences a surge, fueled in part by firms announcing their intent to launch Ether futures-based ETFs in early October.