The ongoing U.S. government shutdown has complicated the already fragile path of passing a comprehensive crypto market structure bill, which aims to establish clear federal oversight for digital assets. While the closure may not completely derail legislative efforts, experts suggest it has delayed progress at a critical stage for the Senate Banking Committee. With the 2026 midterms approaching, the window for bipartisan cooperation on cryptocurrency regulation appears to be narrowing.
Currently in its second week, the shutdown has left federal agencies underfunded and key staff furloughed, severely limiting their ability to advise lawmakers. This lack of technical input is slowing the drafting of the long-anticipated crypto market framework that would divide regulatory authority between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Kristin Smith, president of the Solana Policy Institute, called the staff absence “the biggest setback,” though she stressed that discussions among lawmakers are continuing despite the disruption.
Industry observers, including Ron Hammond of Wintermute, estimate that the chances of a Senate vote on the crypto market structure bill before year’s end remain around 60%. However, if the shutdown extends for weeks or months, that probability could drop sharply. “Timing is of the essence,” Hammond said, noting that if the process drags into spring, the likelihood of final passage before the 2026 elections could fall below 50%.
Adding further complexity is the political environment surrounding former President Donald Trump’s administration, which has championed digital assets through initiatives like the World Liberty Financial DeFi project and TRUMP memecoin. Reports from Bloomberg suggest the Trump family has profited significantly—over $620 million—from crypto ventures, including mining and token projects. These ties have turned crypto into a politically charged topic, with Democrats wary of supporting legislation that could be portrayed as pro-Trump.
Despite these headwinds, industry leaders maintain optimism. “Shutdown or no shutdown, this is a really big task, and it’s important that we get this right,” Smith emphasized. The Senate Agriculture Committee is expected to release its own version of the bill, which will later need to be reconciled with the House’s Clarity Act—a measure passed earlier this year to define regulatory parameters for digital assets and stablecoins.
A key issue remains how to categorize ancillary assets—digital commodities linked to securities through investment contracts. The Senate Banking Committee’s draft defines them as “intangible, commercially fungible assets”, but legal experts have criticized the terminology as doctrinally unclear. Teresa Goody Guillén, a former SEC counsel, has argued that both the Clarity Act and market structure legislation must simplify their definitions to ensure legal consistency.
Beyond legal definitions, lobbying battles continue to shape the bill’s future. Traditional banks have intensified efforts to limit crypto exchanges from offering yield on stablecoins, while blockchain industry groups fight to maintain open innovation. Summer Mersinger, CEO of the Blockchain Association, highlighted rare bipartisan consensus, stating: “There’s genuine momentum on both sides of the aisle. Washington understands the U.S. needs clear rules of the road.”
Conclusion: The U.S. government shutdown has exposed how fragile and politically charged crypto regulation remains. While legislative progress continues behind the scenes, partisan tensions, economic pressures, and upcoming elections make the path forward uncertain. For now, the crypto industry must brace for a prolonged wait as policymakers balance innovation, risk, and political survival.
