Crypto Brief: Washington Gridlock Edition

ByMolly McNearney

Key highlights:

  • A U.S. government shutdown may not hurt crypto as much as it used to, but it will still slow down projects that are already behind schedule.
  • Crypto’s progress in Washington, D.C., has slowed down, and a government shutdown next week could make things even worse.
  • The U.S. government appears to be on track for a shutdown. It may not hit crypto directly, but it will slow down the policymaking that shapes the industry’s future.

Right now, three big questions surround market structure legislation:Will Congress actually pass a bill? When could it happen? And how might a government shutdown impact the whole process?

A shutdown could also slow down regulators’ rulemaking efforts outside of Congress, though this might not be a major problem unless the shutdown drags on for a long time.

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A government shutdown will likely make progress on crypto market structure legislation even slower. Several experts I spoke with this week said the chances of such a bill reaching Congress and the president’s desk this year are already very low, even without the shutdown threat. The Senate Banking Committee has already delayed its planned markup hearing from Sept. 30 to late October, and the Senate Agriculture Committee still hasn’t released its draft legislation. For any market structure bill to move forward, it would need approval from both committees before heading to the full Senate and then the House of Representatives.

Washington Gov Decision

Many experts say that if Congress can’t pass the crypto market structure bill by the end of this year, there’s still a good chance of progress in 2025. But a government shutdown would make things even tougher. Shutdowns are usually solved with short-term spending deals that just kick the problem a few weeks or months down the road, adding more delays. If the shutdown happens, Senate committees may have to postpone their planned markup hearings.

Jessica Martinez, Senior Director of Government Relations at the Blockchain Association, said that while both sides are negotiating in good faith, a shutdown would slow down critical work on crypto policy. Still, she believes Congress is committed to getting a bipartisan bill passed. Kristin Smith, president of the Solana Policy Institute, echoed this, calling a shutdown a “setback” but noting that lawmakers still seem focused on moving the bill forward.

Senator Kirsten Gillibrand (D-N.Y.) also urged patience, saying Congress shouldn’t rush just to meet a September deadline. Right now, she explained, the biggest priority is avoiding a budget crisis on September 30. She stressed that getting market structure policy right—and making sure it has bipartisan support—matters more than sticking to an artificial timeline.

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The silver lining for crypto could be the regulators. Even if agencies like the SEC, CFTC, and Treasury have to pause non-essential work during a shutdown, many of their rulemaking efforts are already moving forward and are in the public comment stage.

USA decided crypto shut down

Didier Lavallee, CEO of Tetra Digital in Canada, said a shutdown might slow SEC Chair Paul Atkins’ plans for a while, but overall, there’s still strong support from both parties to keep crypto policymaking moving.

“There might be some short-term delays in policy work, but it’s unlikely to stop progress in the long run.”

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