The U.S. government entered its fourth week of closure on Wednesday, exceeding its second-longest shutdown on record, and the crypto industry is lamenting the big-ticket items being affected, even if the closure of the federal agencies aren’t yet causing direct pangs.
The closure of the government means the Senate is primarily focused on the task of re-opening it, largely shoving other policy pursuits aside. This period was meant to be the narrow window for crypto action in which the Senate had a shot at matching the House of Representatives’ Digital Asset Market Clarity Act to regulate the U.S. crypto markets. That top goal of the industry has potentially missed its shot for 2025.
“Politically, time is running out for key bills,” said Cody Carbone, CEO of the Digital Chamber. But potentially more painful than political costs may be the industry missing out on needed U.S. tax policies. “The lack of tax clarity, and missed opportunities to create reasonable tax treatments, may be a bigger long-term cost.”
During the shutdown, federal agencies can only deploy employees they’ve deemed essential. It’s not only stymied Congress’ crypto work, but it also halted federal regulators from working on rules for crypto governance, including regulations for stablecoins and the online work at the U.S. Securities and Exchange Commission to hatch digital assets market proposals.
In some crypto policy areas, though, the work has continued as normal, such as an example shared by Caitlin Long, CEO of Custodia Bank, who said a U.S. patent matter was resolved for her company during the shutdown.
“We haven’t felt it,” she told a crowd at DC Fintech Week in Washington.
However, the halt of certain efforts at the SEC — such as the approvals of exchange-traded products (ETPs) and initial public offerings — could have a detrimental effect on the space in the longer term.
So far, the prediction markets are foreseeing a likelihood that this government shutdown exceeds the longest on record, which was during Trump’s first term in the White House. The record is 35 days, which is still about two weeks away, but contracts on Polymarket and Kalshi are predicting the doors to open again in mid-November.
“We encourage lawmakers to find an off-ramp for the closure,” Carbone said. “Americans are feeling the pinch as well as the crypto industry.”
Kristin Smith, president of the Solana Policy Institute, said in a post on social media site X that the closure hasn’t derailed political progress, and the meetings that industry officials were having Wednesday with U.S. senators on the market structure legislation suggests she may be right.
Read More: State of Crypto: What Happens to Crypto if Government Shutdown Lingers
