This past Wednesday marked the U.S. government’s shutdown, leading to the furlough of federal employees classified as non-essential and requiring others to work without pay (they will receive backpay once funding resumes). If the government reopens within the next few weeks, D.C.’s crypto policymaking should remain relatively unaffected. However, a prolonged shutdown will likely hinder crypto initiatives.
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The context
The government closed on Wednesday, and as of the time of writing, there seems to be no imminent agreement between Democrats and Republicans to resolve the standoff.
Significance
As highlighted in last week’s newsletter, the immediate impact of the shutdown is clear: delays for market structure legislation, federal agencies’ rulemaking, and the expected launch of new spot crypto exchange-traded funds are all likely to be pushed back.
A brief shutdown of only a few days — or potentially up to two weeks — would allow these initiatives to restart smoothly. A shutdown exceeding two weeks, however, would complicate the scenario.
Analysis
The longest U.S. government shutdown in history spanned from December 2018 to January 2019, during President Donald Trump’s administration. Back then, Democrats held the House while Republicans controlled the Senate. This latest shutdown is still in its infancy and could last just a few days or extend further.
The shutdown’s most immediate impact on crypto issues relates to exchange-traded funds. The Securities and Exchange Commission was anticipated to approve ETFs linked to assets like Solana and to be approved this week. Despite some progress earlier, the deadline arrived before all necessary paperwork could be finalized, preventing issuers from launching.
Prior to the shutdown, the SEC managed to finalize a couple of no-action letters. Other agencies, like the IRS, also succeeded in publishing interim guidance before the shutdown.
Ron Hammond, head of Policy and Advocacy at Wintermute, shared with CoinDesk that it’s important to note how active crypto policy developments have been.
Due to the shutdown, policymakers now face uncertainty regarding these regulatory actions, he explained.
On the legislative side, a source familiar with Washington dynamics indicated that the timeline for market structure legislation should remain relatively unchanged if the shutdown concludes within the next two weeks. Despite lawmakers aiming to hold a potential markup — a session where they discuss bills before voting to move them forward — by October 20, 2025, this seems unlikely due to ongoing discussions about the bill’s text.
Another source highlighted that one complicating factor for lawmakers and their staff is the furlough of regulatory agencies they may need to consult with, making it impossible for them to obtain feedback or answers regarding their market structure bill.
Hammond suggested that December “is still a viable timeline” for moving legislation through Congress at this point.
“The longer this shutdown persists, the more partisan tension will infiltrate the necessary bipartisan dialogue on significant issues like crypto market structure,” he remarked. “Nevertheless, this shutdown situation isn’t altering our assessment of the likelihood of market structure legislation passing before the 2026 elections begin.”
Hammond is particularly interested in observing if a markup occurs in the Senate Banking and Agriculture Committees by Thanksgiving.
This week
- No crypto hearings or events are scheduled among lawmakers this week.
If you have suggestions or questions for next week’s discussion, or any other feedback, feel free to reach out to me at nik@coindesk.com or connect with me on Bluesky @nikhileshde.bsky.social.
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See you next week!
