A potential shutdown of the US government could trigger a ripple effect in the realms of blockchain regulations, digital assets, and crypto-related legislative agendas. As the US House of Representatives recently rejected a Senate bill aimed at funding the government, a nearing shutdown appears more likely. For the uninitiated, a government shutdown occurs when Congress fails to pass funding for the next fiscal year, resulting in a stall in all ‘non-essential’ federal departments and agencies.
In such a scenario, the inevitable halt in funds—and consequently, in regulatory operations—could profoundly impact digital assets and related legislation. For instance, bills that might otherwise shape the future of digital assets—beneficially or detrimentally—would hit a dead-end amid the shutdown. Furthermore, key financial regulators like theSecurities and Exchange Commission and theCommodity Futures Trading Commission would dwindle down to skeleton crews with significantly limited enforcement and oversight capabilities.
On the other side of the coin, an eventual re-opening of the government might not immediately bring crypto-norms back on the legislative map, as lawmakers could prioritize other policies over blockchain regulations. Additional legislative action would undoubtedly need attending to before the year ends, potentially putting digital assets lower on the priority list.
Reflecting this uncertainty, Sheila Warren, CEO of the Crypto Council for Innovation, remarked how unclear it was as to which issues would skyrocket to the top of Congress’s interest list post-shutdown. Besides stimulating the government, it must tackle several statutory deadlines requiring urgent legislative measures before the year wraps up.
In recent developments, House lawmakers passed several crypto-focused bills like the Financial Innovation and Technology for the 21st Century Act, the Blockchain Regulatory Certainty Act, and the Keep Your Coins Act. However, should a shutdown happen, no progress on these bills is likely, postponing amendments and votes indefinitely.
Given the precedence of other issues, crypto could easily get bumped lower in terms of priority. Compounding the problem, the forthcoming 2024 elections will likely add more distractions to legislative focus. Coinciding with this, the Treasury Secretary also flagged her concern over the perils of a shutdown, terming it as ‘dangerous’ and ‘unnecessary’, capable of causing ‘economic headwinds’ in the future.
It’s a critical crossroad—in a constantly evolving field, regulated progress is paramount, and thus, the potential influence of a government shutdown on the crypto-world adds another layer of uncertainty to the tumultuous world of digital currency.
Source: Cointelegraph
