|
Washington Policy Update
Allison Karakis, Senior Director, Government Relations
The longest government shutdown in US history concluded in November, but it has significantly impacted Washington and altered the path of the Administration and Congress. For 43 days, progress on the Administration’s regulatory agenda was minimal since many government employees were furloughed. Congressional hearings and legislative work were delayed as offices faced varying staffing levels, and funding the government became the primary focus. The House experienced a record-breaking 54-day recess while waiting outside of Washington, while the Senate repeatedly voted on the House-approved funding bill without success. A compromise was reached, but much work remains with only three agencies – Veterans, Agriculture, and Congressional operations – receiving full-year funding. The rest are funded through Jan. 30, 2026. Although there are still significant disagreements, most believe that Congress will avoid another shutdown and figure out a compromise.
Both chambers are now rushing to catch up and push their priorities forward. This may be increasingly difficult as the House is experiencing shifting dynamics, with various groups pushing priorities that do not align with Republican leadership. With narrow majorities, this is often a challenge, but prior to the shutdown, leadership had managed the caucus with minimal apparent opposition.
Congress must also pass the National Defense Authorization Act by the end of the year, as it has done annually for decades. While this bill is a crucial authorization for national security it has also become a means to incorporate various unrelated provisions. The Senate included a version of the Road to Housing Act, and negotiations are ongoing with the House to retain that provision in the final bill.
Senate Digital Assets Market Structure Legislation Takes Shape
The Senate took additional steps toward creating a digital assets market structure with the release of a legislative discussion draft by U.S. Senate Committee on Agriculture, Nutrition, and Forestry Chairman John Boozman (R-AR) and Sen. Cory Booker (D-NJ) that would provide new authority to the Commodity Futures Trading Commission (CFTC) to regulate digital commodities. This bipartisan proposal expands upon the CLARITY Act approved by the House in July.
The discussion draft includes:
- A definition of digital commodities and the establishment of a spot market digital commodity regulatory regime within the CFTC;
- Consumer protections, including customer fund segregation requirements, conflict of interest safeguards, customer disclosure requirements, and prohibitions on certain affiliated trading;
- A trading registration regime designed to facilitate liquid and resilient regulated markets while protecting retail participants;
- Requirements for the CFTC and SEC to coordinate and collaborate on necessary inter-agency rulemaking;
- Protections for self-custody and innovative technology; and
- A new funding stream for the CFTC to stand up a spot market regulatory regime.
| 
