The U.S. federal government is currently experiencing the longest shutdown in its history, now spanning 36 days. This unprecedented situation poses a direct threat to the adoption of crucial cryptocurrency legislation, with the results of the midterm elections further complicating ongoing negotiations.
Key Developments
- •The U.S. government shutdown has surpassed 36 days, making it the longest in the nation's history.
- •The significant Democratic victories in the midterm elections are likely to further delay budget negotiations.
- •The adoption of legislation concerning the crypto market structure, originally targeted for 2025, is now expected to be postponed to 2026.
- •Government experts on forced leave are slowing down the drafting of essential legislative texts required for the bill's progress.
A Lingering Political Deadlock Affects the Crypto Agenda
The U.S. federal government marked a historic milestone on Wednesday, reaching 36 days of paralysis, thereby breaking the previous record of 35 days.
This prolonged and unprecedented situation is plunging the administration into chaos and directly jeopardizing the future of crypto regulation. Lawmakers remain divided over federal budget funding, and there are no immediate indications of a resolution.
Democrats had appeared ready to compromise earlier in the week, with many anticipating a government funding vote that would not include conditions on health insurance premiums. However, Tuesday's election results have altered the political landscape.
The election outcomes have far surpassed polling forecasts, strengthening the Democratic position in Congress. This shift in the balance of power significantly complicates negotiations and delays any potential budget agreement.
The timeline initially set for crypto regulation is gradually collapsing. Summer Mersinger, Executive Director of the Blockchain Association, raised concerns on Wednesday.
She confirmed that the shutdown's extension substantially increases the risk of a postponement to 2026. Public policy experts in the crypto sector universally share this growing pessimism. The issue extends beyond a simple scheduling conflict.
A significant number of government specialists, whose expertise is vital for drafting these complex texts, are currently on forced leave. Without their indispensable technical knowledge, it is impossible to make concrete progress on legislation related to market structure. This administrative paralysis is creating a major bottleneck for the entire legislative process.
Optimism Versus Ground Reality
Patrick Witt, Executive Director of the President’s Council of Advisors on Digital Assets, is maintaining a stance of cautious optimism.
Speaking at Ripple’s Swell conference on Wednesday, he reiterated President Donald Trump's commitment to signing a final text "by the end of 2025," despite the escalating obstacles.
Witt has been actively engaged in frequent trips to Capitol Hill in recent weeks, holding regular meetings with both Republican and Democratic senators to "move things forward."
His political agenda is intensifying even as the federal administration remains paralyzed. Paradoxically, he views the shutdown as presenting some unexpected advantages for his lobbying efforts.
"We’ve had the chance to really engage with offices, staff, and members on the substance of this bill," he explained to CoinDesk TV.
The administrative paralysis has effectively freed up legislators' time. These in-depth discussions might have been more challenging under normal circumstances, when Congress is typically overwhelmed by numerous competing priorities. The White House is organizing regular meetings to maintain pressure on the legislative front.
Industry professionals hold divergent views on the matter. One prominent public policy expert believes that an improvement to the market structure "by Thanksgiving" remains a possibility.
However, a second expert is considerably more reserved, considering the adoption of comprehensive legislation before the end of 2025 to be "unlikely." This individual anticipates a vote by both chambers of Congress sometime in 2026.
Gracy Chen, CEO of Bitget, offers a more philosophical perspective on the current situation.
We view the record 36-day shutdown of U.S. administrations as a temporary setback that highlights the value of resilient and decentralized systems.
She suggests that this crisis "could ultimately create momentum in favor of reform by highlighting the inefficiencies of traditional financial systems."
A Race Against Time
The current political context dangerously complicates the legislative equation. Senator Thom Tillis recently emphasized that the window of opportunity will close by February 2026 at the latest. Following this critical deadline, the midterm elections will transform Congress into an electoral arena, making any bipartisan consensus exceptionally difficult to achieve.
This pressing reality underscores the urgency displayed by Republicans. John Boozman, chairman of the Senate Agriculture Committee, is actively engaged in negotiations with his Democratic counterparts.
His objective is clear: to present "very soon" a bipartisan bill that is acceptable to all parties. The Senate banking committee has also initiated promising discussions in recent weeks.
Brian Armstrong, CEO of Coinbase, recently concluded a strategic visit to Washington, where he met with several key lawmakers from both parties. His findings have reignited hope within the industry.
Reports indicate that the Senate has found common ground on "about 90%" of crypto-related issues. This unexpected convergence could significantly accelerate the legislative process, provided the shutdown concludes promptly.
In the meantime, the SEC is operating with a drastically reduced staff. The regulatory agency has been compelled to postpone the review of several crypto ETF applications. Sixteen requests remain pending, covering major assets such as XRP and Dogecoin. The industry is eagerly awaiting the end of this administrative paralysis to unblock these crucial procedures.