Imminent US Government Shutdown Could Stall Progress on Crypto Legislation
Summary:
The US government's impending shutdown may delay the progression of various crypto bills awaiting approval. House Financial Services Committee previously approved many crypto-centric bills, including the Financial Innovation and Technology for the 21st Century Act (FIT). If a shutdown occurs, lawmakers may halt progress on legislation until they secure governmental funding for the next fiscal year. Some of these bills have bipartisan support, but different political strategies could jeopardize approval. A shutdown would also suspend "non-essential" responsibilities, including those of the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission concerning digital assets.
The potential for a governmental shutdown in the United States within the coming week looms overhead, placing Kevin McCarthy, the Speaker of the House, in a tough spot as he faces friction within his own party regarding budget plans. This turbulent situation could hinder the progress of several crypto legislation awaiting approval. House Financial Services Committee members previously approved groundbreaking decisions in favor of multiple crypto-centric bills including the Financial Innovation and Technology for the 21st Century Act (FIT), the Blockchain Regulatory Certainty Act, the Keep Your Coins Act, and the Clarity for Payment Stablecoins Act in July. These pieces of legislation may now be vetted by the House during the present Congressional session.
However, if a shutdown occurs, this may impede lawmakers' ability to proceed with any legislation until they can secure funds for the next fiscal year's governmental operations. While shutdowns are not a novel aspect of the U.S. government, their underlying motivations seem to have transitioned from financial issues to strategic political plays over time.
From the observation of Ron Hammond, the director for government relations at the Blockchain Association, potential for a shutdown appears to be increasing due to fragmentation within the House Republicans and the Senate’s independent approaches. On his X podcast, he hinted that a prolonged shutdown may delay consideration of various crypto-related bills, including FIT and regulatory bills addressing stablecoins.
If and when the shutdown saga concludes, it will be crucial to gauge its impact on the crypto landscape considering that passing legislation through the Senate has always been challenging. Hammond foresees that some of the bills, which have been endorsed by both major parties, will likely be approved during House floor votes. However, he also warns of potential political "landmines" that could jeopardize these bills, given the divergent strategies of the two major parties towards stablecoin regulation.
Due to the impending start of a new fiscal year on October 1, lawmakers face the deadline of September 30 to reach a consensus on the disputed budget bills. A shutdown would force all government agencies to halt "non-essential" duties. This includes actions carried out by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission in relation to digital assets.
Recent reports suggest McCarthy’s plans to propose spending bills encompassing certain polarizing actions, such as limiting access to abortion, funding the construction of a wall between the U.S. and Mexico, and other measures primarily supported by far-right Republicans. These proposals may fail to secure Democrats’ approval. The House of Representatives is to convene on September 26 to discuss the matter, simultaneously, the Senate plans to consider its own interim funding provision.
Published At
9/25/2023 9:54:07 PM
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