The U.S. Government Faces Potential Shutdown Amid Funding Bill Rejection
The United States House of Representatives has rejected a bill passed by the Senate aimed at funding the government, indicating that a partial government shutdown may occur starting on Oct. 1. A government shutdown happens when Congress fails to pass funding legislation for the next fiscal year, resulting in the suspension of nonessential activities by federal agencies and departments. Even a short shutdown could delay crypto bills as other issues take priority once activities resume.
Crypto Bills May Take a Backseat During Shutdown
If a government shutdown occurs, crypto-focused bills like 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 put on hold. Congressional priorities may shift during a shutdown, and distractions are expected as the 2024 elections approach. Treasury Secretary Janet Yellen has criticized House Republicans’ failure to act, warning that a shutdown could have economic consequences.
Democratic Criticism and Uncertainty
Prior to any bills being presented in the House, Democratic members of the House Financial Services Committee criticized Republicans at a hearing on SEC oversight. While concerns over government funding were raised, it is unlikely that lawmakers will address crypto-related legislation before Oct. 1. The fractured divisions among House Republicans and separate directions taken by the Senate make a shutdown increasingly likely.
Impact on Crypto Market
At the time of writing, Bitcoin’s price had dropped below $27,000 but without any apparent correlation to news about congressional spending bills or SEC decisions. In contrast, Ether’s price had surpassed $1,600 as firms announced plans to launch ETFs tied to Ether futures in early October.
Hot Take: Potential Setback for Crypto Legislation
If a government shutdown occurs, it could delay the progress of important crypto bills in Congress. With other issues taking priority and distractions increasing as the 2024 elections approach, the fate of these bills remains uncertain. The crypto market may experience fluctuations during this period, with Bitcoin’s price currently showing some decline while Ether’s price remains relatively stable. The impact of a shutdown on the crypto industry will depend on its duration and the subsequent legislative focus once activities resume.
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