The American government is going through the longest paralysis in its history with 36 days of blockage. This unprecedented situation directly threatens the adoption of crucial legislation for crypto. The results of the midterm elections further complicate the negotiations.
In brief
- The US government shutdown has now exceeded 36 days, becoming the longest ever recorded in the country's history.
- Democrats' landslide victory in the midterm election could further delay budget negotiations.
- The adoption of legislation on the structure of the crypto market, initially planned for 2025, will likely be pushed back to 2026.
- Government experts on forced leave are slowing down the drafting of the legislative texts necessary to advance the bill.
A political impasse that drags on and paralyzes the crypto agenda
The American federal government reached a historic milestone on Wednesday: 36 days of paralysis, shattering the old record of 35 days.
This unprecedented situation plunges the administration into chaos and directly threatens the future of crypto regulation. Lawmakers remain divided over funding the federal budget, and there is no sign of a quick resolution.
Democrats appeared ready to give ground this week. Many anticipated a government funding vote without compensation for health insurance premiums. But Tuesday's election changes the situation.
The results far exceeded poll predictions and strengthened the Democratic position in Congress. This new balance of power complicates negotiations and pushes back any budgetary agreement.
The originally planned timeline for crypto regulation is gradually collapsing. Summer Mersinger, executive director of the Blockchain Association, sounded the alarm on Wednesday.
She confirms that the extension of the shutdown “significantly” increases the risks of postponement to 2026. Experts in the public policy sector unanimously share this growing pessimism. The problem goes well beyond the simple calendar question.
Many government specialists capable of drafting these complex texts are currently on forced leave. Without their essential technical expertise, it is impossible to make concrete progress on legislation relating to market structure. This administrative paralysis creates a major bottleneck for the entire legislative process.
Between stated optimism and reality on the ground
Patrick Witt, executive director of the President's Council of Advisors for Digital Assets, maintains cautious optimism.
During Ripple's Swell conference on Wednesday, he reaffirmed Donald Trump's position. The American president still wants to sign a final text “by the end of 2025”, despite growing obstacles.
Witt has been making frequent trips to the Capitol in recent weeks. He regularly meets with Republican and Democratic senators to “get things done.”
His political agenda is intensifying even as the federal administration remains paralyzed. Paradoxically, he considers that the shutdown presents certain unexpected advantages for his lobbying work.
“ We had the opportunity to really engage with offices, staff and members on the substance of this bill “, he explains to CoinDesk TV.
Administrative paralysis frees up legislators’ time. These in-depth discussions would have been difficult in a normal context, overwhelmed by the multiple competing priorities of Congress. The White House is holding regular meetings to keep up the pressure.
Professionals in the sector have divergent opinions. A first public policy expert believes that an improvement in the market structure “by Thanksgiving” remains possible.
A second appears clearly more reserved. The adoption of a complete law before the end of 2025 seems “unlikely” to him. Instead, he is counting on a vote by both houses of Congress in 2026.
Gracy Chen, CEO of Bitget, provides a more philosophical analysis of the situation.
We view the record 36-day U.S. government shutdown as a temporary setback that underscores the value of resilient, decentralized systems.
For her, this crisis “could ultimately create momentum in favor of reform by highlighting the inefficiencies of traditional financial systems”.
A race against time
The political context dangerously complicates the legislative equation. Senator Thom Tillis reiterated this during recent discussions: the window of opportunity will close no later than February 2026. After this critical deadline, the midterm elections will transform Congress into an electoral arena. Any bipartisan consensus will then become almost impossible to obtain.
This implacable reality explains the urgency displayed by the Republicans. John Boozman, chairman of the Senate Agriculture Committee, is actively negotiating with his Democratic counterparts.
Its objective remains clear: to present “very soon” a bipartisan text acceptable to all. The Senate Banking Committee has also begun promising discussions in recent weeks.
Brian Armstrong, CEO of Coinbase, recently completed a strategic tour in Washington. There he met with several key parliamentarians from both camps. His observation revives hope within the industry.
The Senate reportedly found common ground on “around 90%” of crypto issues. This unexpected convergence could speed up the legislative process if the shutdown ends quickly.
Meanwhile, the SEC is operating with drastically reduced staff numbers. The regulatory agency had to postpone the examination of several crypto ETF applications. Sixteen applications remain awaiting decision, involving major assets like XRP and Dogecoin. The industry is impatiently awaiting the end of this administrative paralysis to unblock these procedures.
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