The US government closed the last Wednesday and imprisoned all federal employees who are considered non-essential, and forced the rest to work without pay (though they should receive backpay when the government is formally financed again). If the government reopens within the next few weeks, it should not have too much of an effect on DC’s crypto policy. The longer the shutdown extends, but the more delayed crypto insert will be.
You read the state of Crypto, a Coindesk -News letter that looks at the intersection of cryptocurrency and the government. Click here to sign up for future editions.
The story
The government closed Wednesday, and at least from the press point, Democrats and Republicans do not appear to be close to an agreement to open it again.
Why it matters
As mentioned in last week’s newsletter, the immediate effects of the shutdown are pretty straightforward: The market structure legislation is likely to be delayed, federal agencies’ regulations are likely to be delayed, and new spot-crypto exchange-traded funds will not be launched as many hoped in the coming days.
If the shutdown is only a few days – or potentially as long as two weeks – these endeavors should resume rather trouble -free. If the shutdown goes beyond that, the picture becomes very muddier.
Breaks down it
The longest US government’s shutdown in history took place between December 2018 and January 2019 under President Donald Trump’s first period. At that time, the Democrats controlled the House of Representatives while Republicans controlled the Senate. This latest shutdown is only a few days old from press time and can last only a few days or can extend.
Perhaps the most immediate and tangible impact of the government’s shutdown on crypto questions is on stockpined funds. Securities and Exchange Commission was expected to allow ETFs that track the prices of assets like Solana and To launch the last week. While there was some movement last week and Monday, the clock ran out before all the last paperwork could be pushed through and the issuers have not yet been able to launch.
SEC was able to complete a few letters without action before shutdown as well. Other agencies, such as the IRS, were similar to publishing preliminary guidance before shutdown.
Ron Hammond, head of politics and advocacy in Wintermute, Coindesk said that “it cannot be underestimated how busy cryptopolitics developments have been.”
With the shutdown, decision makers in Limbo are about these types of legislative actions, he said.
On the legislative front, a person who is familiar with the dynamics of Washington, DC, said they do not expect the timeline of market structure legislation to change a lot if the shutdown ends within the next two weeks or so. While legislators are looking to have a possible marking – a consultation in which legislators debate bills before they potentially vote to promote them to the full Senate (or house) – before October 20, 2025, this seems unlikely, no matter when the shutdown ends as they are still working on the text’s text.
Another person familiar with this dynamic said that a further complicating factor for legislators and their employees is the fact that the regulatory agencies they had to consult are currently flooded so that the legislators who write the market structure proposal cannot receive feedback or answers to questions they may have for these federal regulators.
Hammond said that December is “still possible” to move legislation through Congress at the moment.
“The longer this shutdown pulls on, the more partical bitterness seeps into the necessary Bipartisan discourse on important topics such as Crypto Market Structure,” Hammond said. “Still, this shutdown drama does not affect our calculation of odds of market structural legislation chances to pass to be more likely than not before the 2026 election.”
Hammond said he was watching for a mark in the Senatsbank and Agricultural Committees from Thanksgiving.
This week
- No hearings or events are held by lawmakers this week around crypto.
If you have thoughts or questions about what to discuss next week or any other feedback you would like to share, feel free to e -mail me at [email protected] or find me at bluesky @nikhileshde.bsky.social.
You can also participate in the group interview at Telegram.
See you next week!
