The prolonged U.S. government shutdown has thrown the country’s digital asset agenda into disarray, halting progress on both crypto legislation and exchange-traded fund approvals.
What was once expected to be a defining period for regulatory clarity in the sector is now turning into an extended waiting game.
According to analysts, the SEC’s ongoing closure has effectively paused evaluation of multiple altcoin ETF applications, including those tied to XRP and Solana. These products were widely seen as a gateway for mainstream adoption of non-Bitcoin assets, but the freeze has pushed their timelines further into uncertainty.
Beyond the ETF delay, the political stalemate in Washington has also derailed work on the long-debated CLARITY Act – the most comprehensive crypto regulation bill in U.S. history. Sources cited by The Block indicate that lawmakers are no closer to consensus, with fresh disputes emerging between Democrats and Republicans over the scope of the proposed rules.
TD Cowen, a major investment bank monitoring the process, now expects the legislation to remain stalled until after the 2026 midterm elections. The firm said that while limited progress within the next year isn’t impossible, the political incentives currently favor postponement. “There are simply more reasons to delay than to act quickly,” analysts concluded.
At the heart of the disagreement lies a controversial Democratic proposal to restrict senior government officials – including President Donald Trump – and their families from holding ownership in crypto-related companies. Republicans have resisted, arguing that the measure could derail bipartisan cooperation entirely.
The CLARITY Act, first approved by the House of Representatives in mid-2025, aims to define how digital assets are classified and which agencies – the SEC or the CFTC – will regulate them. It also introduces clearer standards for secondary asset trading, setting it apart from the more limited GENIUS Act, which focuses solely on stablecoin oversight.
For now, the crypto industry is stuck in neutral. Without active regulators or new legislation, ETF issuers, blockchain developers, and institutional investors alike are waiting for Washington to resume work – hoping the next political chapter finally brings clarity to America’s digital asset landscape.
