Congress faces a shrinking window for digital asset regulation as government shutdown drags on
The ongoing U.S. government shutdown is stalling progress on crucial cryptocurrency legislation, with lawmakers warning that political gridlock could delay regulatory clarity until after the 2026 elections.
Senator Thom Tillis, a Republican from North Carolina and member of the Senate Banking Committee, said Congress has only a few months left to pass major crypto-related bills before election-year politics take over. “Lawmakers need to act by January or February if they want to move forward on digital asset regulation,” Tillis reportedly said, emphasizing that the opportunity to legislate is narrowing fast.
According to industry observers, the 2026 midterm elections could freeze legislative activity, leaving ongoing efforts such as the market structure framework—passed by the House in July—stuck in limbo. The bill, which aims to define clearer oversight for crypto markets, is currently under review in the Senate.
Shutdown stalls crypto legislation
The shutdown, which began on Oct. 1, has further slowed progress as Congress remains divided over budget and healthcare funding disputes. While the Senate continues to meet, House Speaker Mike Johnson has delayed several legislative sessions, including those involving financial reform and digital asset regulation.
Tillis voiced skepticism about progress this term, saying he was “not optimistic about moving further on stablecoins or broader digital asset policy in this Congress.” His remarks highlight growing frustration among policymakers and market participants seeking clearer rules for the crypto industry.
Crypto bills and regulatory leadership in limbo
Among the measures affected is the CLARITY Act, a key digital asset bill passed by the House earlier this year. Senate leaders had planned to expand it into a broader market structure law, potentially aligning with the Responsible Financial Innovation Act co-sponsored by Senator Cynthia Lummis.
Meanwhile, regulatory appointments are also on hold. Over the weekend, SEC official Michael Selig confirmed that President Donald Trump had nominated him to chair the Commodity Futures Trading Commission (CFTC)—a critical agency overseeing crypto derivatives and market structure. However, his Senate confirmation hearing has yet to be scheduled amid the ongoing shutdown.
Industry awaits direction
The prolonged political impasse has left the digital asset industry waiting for policy certainty. Market experts warn that continued inaction could push innovation overseas, as other jurisdictions advance clearer frameworks for blockchain and digital asset regulation.
With deadlines approaching and political tensions mounting, the next few months may determine the future of U.S. crypto legislation—and whether Washington can deliver on its long-promised regulatory roadmap.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.