Government shutdowns can create substantial challenges for crypto payroll, tying it closely with market liquidity conditions. The recent U.S. government shutdown lasted over 40 days, resulting in a liquidity reduction of nearly $700 billion. This liquidity drain has had a noticeable impact, causing significant sell-offs in major cryptocurrencies such as Bitcoin and Ethereum, with Bitcoin declining by around 19%. This is an illustration of the interconnectedness between traditional financial systems and cryptocurrency markets.

The withdrawal of funds from the Treasury General Account (TGA) has intensified this situation, leading to a greater reliance on emergency facilities like the Standard Repo Facility (SRF). Consequently, investors…