Senate Forges Ahead with Crypto Bill Despite Shutdown as 2026 Deadline Nears

The US Senate is advancing a bipartisan cryptocurrency market structure bill despite an ongoing government shutdown, with lawmakers aiming to finalize legislation by 2026 to establish clear regulatory frameworks for digital assets. The effort, led by key committee chairs and supported by industry advocates, seeks to address longstanding ambiguities in crypto oversight and position the US as a global leader in digital finance.

Senate Agriculture Committee Chair John Boozman (R-Ark.) and Wyoming Senator Cynthia Lummis, a vocal crypto proponent, are spearheading negotiations to finalize the Responsible Financial Innovation Act, the Senate's version of the House-passed CLARITY Act. The bill aims to delineate regulatory responsibilities between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), while also addressing stablecoin governance and market integrity measures. "We are working very, very soon on a bipartisan bill on market structure," Boozman stated, emphasizing urgency to meet end-of-year committee review benchmarks.

The government shutdown, which began in late October due to funding disagreements, has not derailed legislative momentum. While thousands of federal employees are furloughed, Congress members remain paid and active, allowing bipartisan talks to continue. However, Senator Thom Tillis (R-N.C.), a Senate Banking Committee member, issued a stark warning: lawmakers must act by January or February 2025 to avoid delays from the 2026 midterm elections. "I'm not optimistic about us moving much further on anything around digital assets, stablecoins, or crypto in this Congress," Tillis said, underscoring the narrow window for passage.

The proposed legislation has gained traction as crypto firms and investors demand regulatory certainty. The CLARITY Act, passed by the House in July, laid the groundwork for defining digital asset classifications and reducing overlapping oversight. Senate Banking Committee discussions, though delayed by the shutdown, are expected to resolve 90% of outstanding issues in coming weeks, according to Bloomberg reports. Industry stakeholders, including Coinbase CEO Brian Armstrong, have engaged lawmakers to ensure the bill balances innovation with investor protections.

A critical component of the legislation is stablecoin regulation, a sector that has seen explosive growth but remains vulnerable to systemic risks. The bill could establish federal safeguards for stablecoins, including reserve requirements and transparency mandates, addressing concerns raised by recent market volatility. This aligns with broader global efforts, such as the EU's MiCA framework, to create structured digital asset ecosystems.

The shutdown's impact on crypto policy is multifaceted. While House proceedings are effectively stalled, the Senate's ability to function independently has kept the bill on track. However, Tillis highlighted that the shutdown exacerbates partisan tensions, complicating consensus-building. "Without legislative clarity, the US risks ceding ground to international competitors," noted a policy analyst from the Coin Center think tank.

As negotiations intensify, the outcome of these efforts could redefine the regulatory landscape for crypto in the US. With bipartisan support and industry advocacy converging, the Senate's ability to meet its 2026 passage target will hinge on navigating the shutdown's challenges and aligning with House priorities. For now, lawmakers remain focused on a framework that fosters innovation while safeguarding market stability.