US Government Shutdown Stalls Crypto Market Structure Bill as Midterms Loom

The ongoing US government shutdown is delaying progress on a long-awaited crypto market structure bill that would define how digital assets are regulated. With key federal staff furloughed and political tensions rising ahead of the 2026 midterm elections, lawmakers face new hurdles in advancing crypto policy.

• The US shutdown halts Senate progress on a major crypto regulation bill.
• Staff furloughs slow legislative drafting between the SEC and CFTC.
• Experts say delays could push the bill’s timeline into next year.
• Midterm politics and Trump’s crypto ties may shape legislative strategy.
• Industry leaders urge a simpler, bipartisan approach to crypto regulation.

The US government shutdown has entered its second week, and it’s already complicating efforts to finalize a landmark crypto market structure bill. Lawmakers on the Senate Banking Committee were close to completing their version of the bill — which divides oversight between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) — when the shutdown began.

With agency staff now furloughed, essential technical advice from regulators has stalled, said Kristin Smith, president of the Solana Policy Institute. “This is probably the biggest setback right now,” she noted. While Senate discussions continue, the lack of agency input means progress has slowed considerably.

Ron Hammond, policy head at Wintermute, said the delay could push back a Senate vote on the bill. “The shutdown will definitely affect when that vote happens,” he said, estimating a 60% chance that the Senate could still pass the bill before the end of 2025 — though that likelihood drops sharply if the shutdown lasts a month or longer.

Ultimately, any Senate bill would need to be reconciled with the House’s version, the Clarity Act, which passed earlier this year. If both chambers can agree on a final version, analysts believe there’s an 80–90% chance it could become law before the 2026 midterms. But timing is critical — if the bill drags into spring, its odds fall below 50%.

Political dynamics may also play a growing role. As the 2026 midterms approach, Democrats and Republicans are recalculating their crypto positions. Rebecca Liao, CEO of Saga, said short shutdowns won’t derail policy momentum, but prolonged ones could complicate negotiations. Some Democrats are distancing themselves from the industry amid scrutiny of President Donald Trump’s family crypto ventures, which have reportedly earned $620 million through various DeFi and stablecoin projects.

Industry experts emphasize that passing a crypto market structure bill is far more complex than the GENIUS Act, the stablecoin regulation that Trump signed earlier this year. The market structure bill must define how ancillary digital assets — those not classified as securities — are treated under US law. Hammond said the DeFi sector is closely watching this language, as it will determine how tokens are categorized and traded.

Legal experts like Teresa Goody Guillén have warned that the bill’s reliance on decentralization to classify assets could prove too narrow. She also criticized the Senate’s term “ancillary asset” as doctrinally incorrect and confusing. Kristin Smith agreed that the best path forward is simplicity and flexibility, given how fast crypto technology evolves.

Meanwhile, banking lobbyists are reportedly working to block provisions that allow crypto exchanges to offer yield on stablecoins. Industry advocates have pushed back, framing it as another example of “TradFi versus crypto” tensions in Washington.

Despite the hurdles, optimism remains. Blockchain Association CEO Summer Mersinger said bipartisan support is growing for clearer digital asset rules. “There’s real momentum on both sides of the aisle,” she said. “If Congress gets this right, it can finally deliver the regulatory clarity this industry has been waiting for.”

Final Thought

The crypto market structure bill represents one of Washington’s most significant regulatory challenges yet. The shutdown may be a temporary pause, but with the 2026 elections approaching, political strategy could determine whether the US finally creates a clear, lasting framework for digital assets — or lets another opportunity slip away.