The United States government may face a shutdown in the next week due to political disagreements, particularly within the Republican Party led by House Speaker Kevin McCarthy, regarding government spending plans. This potential shutdown could have adverse effects on the progress of cryptocurrency-related bills awaiting a vote in Congress.
In July, the House Financial Services Committee approved several crypto-focused bills, marking a significant step toward a House floor vote in the current congressional session. However, if a government shutdown occurs, it would temporarily halt legislative activities until funding issues are resolved, including the consideration of crypto bills.
The possibility of a shutdown seems increasingly likely due to divisions within the Republican Party in the House and differing approaches between the House and Senate. This shutdown could delay the passage of important cryptocurrency bills, including the Financial Innovation and Technology for the 21st Century Act (FIT) and stablecoin regulations.
While some of these bills enjoy bipartisan support and may ultimately pass in floor votes, there are political challenges, especially regarding stablecoin legislation, that could hinder their progress. Lawmakers have until September 30 to reach an agreement on spending bills to avoid a shutdown.
If a shutdown occurs, federal agencies, including the U.S. Securities and Exchange Commission and Commodity Futures Trading Commission, would be unable to carry out non-essential functions, potentially affecting their oversight of digital assets.
As of September 25, Speaker McCarthy was planning to introduce spending bills with contentious issues such as abortion access restrictions and funding for a U.S.-Mexico border wall, which have strong support among far-right Republicans but are unlikely to be approved by Democrats. The House of Representatives is scheduled to address the issue on September 26, while the Senate will consider its temporary funding measure.
Recently, in a report by Todayq News on August 25, 2023, the United States Treasury Department released a new rule that required cryptocurrency brokers, including exchanges and payment processors, to report user data to the IRS, curbing tax evasion and also introduced Form 1099-DA for simplified crypto and NFT tax calculations.
While, Chairman of the House Financial Services Committee, Patrick McHenry, criticized newly proposed cryptocurrency taxation rules and expressed concerns about the rules being too broad. Along with McHenry, Bloomberg had also reported that the IRS and Treasury’s proposal covered DeFi and NFTs but excluded mining and staking operations.
