U.S. Government Shutdown Threatens Crypto Bill Timelines

In the upcoming week, there’s a chance that the United States government may face a shutdown. House Speaker Kevin McCarthy faces increasing political pressure within his party regarding the management of spending plans. This critical decision could hinder the progress of pending crypto bills awaiting lawmakers’ votes.

In July, the House Financial Services Committee in the U.S. made significant strides by approving several crypto-related bills. These include 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. This made a historic moment as multiple cryptocurrency-focused bills advanced through the committee, potentially leading to a House floor vote in the current congressional session.

A government shutdown naturally disrupts the progress of legislative initiatives. To proceed, lawmakers must first resolve the funding issue for the upcoming fiscal year. Government shutdowns have occurred at various points in U.S. history, with motivations appearing to shift from public funding concerns to more politically motivated actions.

The Blockchain Association director of government relations, Ron Hammond, commented on the current political climate stating that a shutdown appears increasingly likely due to the fractured divisions within the House [Republican] and the Senate going in their directions.

Hammond also expressed concern about the potential impact on the crypto industry as longer shutdowns could lead to delays in crucial bills related to FIT/market structure and stability measures being addressed.

13) I would like to stress these are just rumors and all the bills mentioned still need to go to a vote in their respective chambers. Upside, both sets of bills are bipartisan and needed. Downside, there is a lot of landmines politically that can tank either bill/any deal.
— Ron Hammond (@RonwHammond) September 25, 2023

Crypto Bills Face Political Hurdles Despite Bipartisan Support

Hammond observed that several bills are enjoying bipartisan support and are positioned for success in floor votes. However, he emphasized the existence of political obstacles that could potentially hinder these bills, specifically due to the divergent approaches of the two major parties concerning legislation concerning stablecoins.

Lawmakers must agree on the spending bills before Sept 30, which marks the beginning of the next fiscal year. Failing to do so would result in a government shutdown, interrupting non-essential activities across federal agencies. This would have consequences for crucial functions like digital asset oversight by the U.S. Securities and Exchange Commission and the Commodity Futures Trading Commission.

Reports indicate that as of Sept 25, Speaker McCarthy was preparing to introduce spending bills encompassing provisions related to abortion access restrictions, funding for a U.S.–Mexico border wall construction, and other initiatives strongly favored by far-right members of the Republican Party but unlikely to garner Democratic approval. The House of Representatives will convene on September 26 to address this matter, while the Senate will evaluate its temporary funding proposal.

“The author’s views are for reference only and shall not constitute any investment advice. Please ensure you fully understand and assess the products and associated risks before purchasing.”