According to a recent analysis, the United States government faces a “significant risk” of no longer being able to pay all of its debts possibly as soon as this June.
United States Government to Default on its Debt
As per the May 12 assessment issued by the United States Congressional Budget Office (CBO), the possibility of the United States government defaulting on its debt in the near future derives from the government surpassing its maximum debt limit of $31.4 trillion on January 19.
According to the CBO, if the debt ceiling continues unaltered, the US government may be in trouble as early as June.
Deficit to Reach $1.5 Trillion in 2023
The CBO states:
“CBO projects that if the debt limit remains unchanged, there is a significant risk that at some point in the first two weeks of June, the government will no longer be able to pay all of its obligations.“
The CBO projects that the deficit in the federal budget is expected to reach $1.5 trillion in 2023, a total of $100 billion in excess of the first estimate in February.
“As a result of those deficits, debt held by the public also increases in CBO’s projections, from 98 percent of GDP at the end of this year to 119 percent at the end of 2033 — which would be the highest level of U.S debt ever recorded,” stated the CBO.
Migration of Crypto Firms from the United States
It is also vital to note that a continual migration of cryptocurrency firms from the United States has lately been witnessed. On top of that, Danny Talwar, Head of Tax at Koinly, believes that the current de-banking currently being carried out among crypto financial organizations across the country may have negative consequences, such as markets shifting away from the United States.
Hong Kong to Emerge as the Next Crypto Hub?
Ambre Soubiran, CEO of the top cryptocurrency market data provider Kaiko, stated that the industry’s “center of gravity” may ultimately shift to Hong Kong as a consequence of the US government’s aversion to crypto regulation.