Some of crypto's momentum in Washington D.C. has stalled, a situation that may become worse if the U.S. government shuts down next week.

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Slowing but not stopping

The narrative

The U.S. government seems headed toward a shutdown. While that won't directly affect crypto, the reverberations from the government shutting down will affect policymaking in the crypto world.

Why it matters

There are three major questions right now when it comes to market structure legislation: Will Congress pass a bill; when might Congress pass a bill; and how will a government shutdown affect this process?

Beyond just Congress, a shutdown might affect regulators' rulemaking efforts, though that may not be as big an issue at the moment (depending, of course, on how long the shutdown lasts).

Breaking it down

Congress has until Sept. 30, 2025 — in other words, Tuesday — to pass a budget bill, or at least a continuing resolution that would keep funding the government. Republicans control the White House, House of Representatives and Senate, but they still need some Democrat support to move a budget bill. Senate Minority Leader Chuck Schumer and House Minority Leader Hakeem Jefferies seemed set to meet and negotiate with President Donald Trump, but Trump canceled the meeting earlier this week. And on Friday, Punchbowl News reported that the House of Representatives' leadership might not bring the body back into session at all until the Senate passes a bill.

A shutdown will likely slow down progress on crypto market structure legislation. The chances of market structure making it through Congress and to the president's desk this year are already growing slim even without the looming shutdown threat, according to multiple people I spoke to this week. A planned markup hearing for the Senate Banking Committee's draft bill was pushed from its tentative Sept. 30 date to late October, and the Senate Agriculture Committee has yet to publish any draft legislation. Any bill addressing market structure would need support from both committees before it moved to the overall Senate and then the House of Representatives.

The individuals said they still expected to see progress next year, if Congress isn't able to move the market structure bill through the Senate and House before Dec. 31.

These chances, however, grow more slim in the face of a shutdown. Locking up the federal government is often remedied with quick, short-term spending deals that only push the drama a few weeks or months further down the road and promise future congressional tie-ups.

If the government does shut down, the Senate committees may have to push back plans for a markup, said Blockchain Association Senior Director of Government Relations Jessica Martinez.

"While there has been good faith negotiation on both sides, a shutdown would stall critical progress on crypto policy," she said in a statement. "Despite a possible delay, our leaders in Congress are committed to getting bipartisan market structure legislation across the finish line."

Kristin Smith, the president of the Solana Policy Institute, said she was optimistic that the legislation would continue to receive bipartisan attention, saying that a shutdown would be a "setback, but it's clear [lawmakers] remain committed" to passing a market structure bill.

Senator Kirsten Gillibrand (D-N.Y.), speaking at CoinDesk's Policy and Regulation event earlier this month, has already tried to tamp down expectations that Congress had to act by the end of September, a deadline previously set by Senate Banking Committee Chair Tim Scott.

"I don't want to put an artificial deadline on anything, because we're in the middle of negotiations about whether we're going to have a bipartisan budget," she said. "The most important issue that Congress has to deal with right now is the fiscal cliff on September 30. That is a much more important deadline that the entire country is relying on … I really urge you, please don't give market structure an artificial deadline, because it is so important for this industry that we get this right and that we do it on a bipartisan basis."

The bright spot for the crypto industry may come from the regulators. While the federal regulators — the Securities and Exchange Commission, Commodity Futures Trading Commission and Treasury Department entities — will all have to stop anything non-critical, a lot of the ongoing rulemaking efforts have already been set in motion. Some of these efforts are in the public comment phase.

Didier Lavallee, the CEO of Canadian firm Tetra Digital, said in a statement that a shutdown might affect SEC Chair Paul Atkins' agenda "in the medium term," but the momentum around crypto policymaking still enjoys bipartisan support.

"So while there may be short-term delays in policy timelines, it’s unlikely to fundamentally derail progress in the long run," he said.

This week

Monday

• 17:00 UTC (1:00 p.m. ET) The SEC and CFTC are holding a joint roundtable on Sept. 29, 2025, to discuss ways of uniting their regulatory efforts.

Tuesday

• Post-trial motions in the Department of Justice's case against Roman Storm are due. As a reminder, Storm was convicted of conspiring to operate an unlicensed money transmitter last month, but the jury did not convict him of two other charges.

If you’ve got thoughts or questions on what I should discuss next week or any other feedback you’d like to share, feel free to email me at [email protected] or find me on Bluesky @nikhileshde.bsky.social.

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See ya’ll next week!