Senate Crypto Bill Stalled: Government Shutdown Freezes Market Structure Progress

Washington gridlock hits crypto legislation—again. The Senate's long-awaited market structure bill now faces indefinite delay as partisan bickering shuts down federal operations.

Key takeaways:

- Regulatory clarity postponed: Institutional players left guessing on compliance frameworks

- Market uncertainty persists: Traders brace for prolonged volatility without legislative anchor

- DeFi breather: Decentralized protocols get temporary reprieve from potential oversight

Meanwhile, lobbyists continue collecting checks while pretending this isn't exactly the outcome their banking clients wanted all along. The shutdown may be temporary, but the revolving door keeps spinning.

TLDR

• The US government shutdown entered its 38th day on Friday, with the Senate preparing to vote on a funding bill to temporarily restore operations.
• The crypto market structure bill (CLARITY Act/Responsible Financial Innovation Act) discussions have continued during the shutdown but taken a backseat to funding negotiations.
• Senator Cynthia Lummis previously outlined a timeline to have the crypto legislation signed into law by 2026, but the shutdown has disrupted this schedule.
• Democrats and Republicans remain gridlocked, with Democrats demanding healthcare subsidy extensions while Republicans seek different terms for reopening the government.
• Federal agencies face mounting economic impacts, including FAA-ordered flight capacity cuts starting at 4% and potentially reaching 10-20% if the shutdown continues.

The US government shutdown reached its 38th day on Friday as senators prepared to vote on legislation that could temporarily reopen federal operations. The Senate will consider a continuing resolution from the House of Representatives to fund the government.

🇺🇸 Polymarket now has odds of government shutdown ending by the next week at 52%.

Please reopen the government man. pic.twitter.com/Dxs8Qbw7u9

— Ash crypto (@AshCrypto) November 8, 2025

The bill faces an uncertain path forward. It needs 60 votes to pass in the Senate after multiple failed attempts in recent weeks.

Crypto Legislation Stalled During Funding Crisis

Republican and Democratic lawmakers have continued discussions on digital asset market structure legislation during the shutdown. The bill passed the House as the CLARITY Act in July and is known as the Responsible Financial Innovation Act in the Senate.

Last time the U.S. government shutdown ended, Bitcoin skyrocketed.

Now, it’s expected to end by mid-November. pic.twitter.com/cmnwa5gopk

— Crypto Rover (@cryptorover) November 7, 2025

The legislation aims to create a regulatory framework for cryptocurrencies in the United States. However, all non-essential legislation has taken a backseat to resolving the government funding crisis.

Members of Congress continue receiving paychecks during the shutdown. Many federal agency staff members have been furloughed or are working without pay.

Democrats have held firm on their demands for healthcare subsidy extensions. They also want to reverse cuts from a July funding bill.

Senate Minority Leader Chuck Schumer proposed a new Democratic plan Friday afternoon. The plan WOULD reopen the government if a one-year extension of Obamacare healthcare subsidies were attached.

Republicans immediately rejected the proposal. Democrats similarly rejected GOP efforts to reach a compromise.

Timeline for Crypto Bill Now Uncertain

Wyoming Senator Cynthia Lummis outlined an ambitious timeline for the crypto market structure bill in August. She said Republicans planned to move the legislation through the Senate Banking Committee by the end of September.

The bill was scheduled to pass through the Senate Agriculture Committee in October. Lummis projected the legislation would be signed into law by 2026.

Reports indicate lawmakers on both committees have discussed terms for the bill. The timeline now appears less attainable due to the shutdown and approaching holidays.

Senate Majority Leader John Thune told reporters Friday he hopes a new compromise bill could gain support. He suggested bringing it to a vote by the weekend.

The new bill could include a revised end date for the shutdown. It might also provide full-year authorization for some federal programs.

Economic impacts from the shutdown continue to mount across multiple sectors. The Federal Aviation Administration ordered a 4% reduction in air traffic capacity at 40 high-traffic airports starting Friday morning.

The cuts took effect at 6 a.m. Eastern Time. The FAA plans to deepen reductions next week to reach 10%.

Transportation Secretary Sean Duffy warned the travel situation could deteriorate into “mass chaos.” He said air traffic capacity cuts could reach 15% or 20% if the stalemate continues.

Airlines have already canceled hundreds of flights due to the capacity restrictions. A federal judge in Rhode Island ordered the TRUMP administration Thursday to immediately cover full SNAP benefits for tens of millions of Americans.