Galaxy Research is optimistic that the crypto market structure bill could advance, despite a few contentious issues.
Following the recent bipartisan Senate meeting, Alex Thorn, Head of Research at Galaxy Research, said there was still a “decent 60%” chance that the bill would be passed.
However, he noted that the odds could change depending on the outcome of the Senate Banking Committee markup, scheduled for the 15th of January.
“Republicans are pushing for the markup...Unclear if the two sides can come together and make that bipartisan, as plenty of issues are still outstanding.”
Will Democrats’ demand stall the bill?
Thorn added that the Democrats maintained their stance on DeFi regulation with three key requests from the Republicans.
First, all front-end DeFi platforms must comply with U.S sanctions. In other words, the platforms must block out sanctioned entities, such as North Korea, or face legal liability.
Additionally, DeFi exchanges must grant “special measures” authority to the treasury, and U.S. regulators should issue rulemaking for “non-decentralized” DeFi.
Put differently, the Democrats called for proper DeFi regulation, a stance that delayed the previous markup deadline in September 2025.
Whether it will become another deal-breaker on the 15th of January remains to be seen.
But moderate Democrat and Nevada Senator Catherine Cortez Masto said she “definitely” expects a markup next week. She added,
“We’re still having conversations, but it’s been very productive — open on both sides to working through all of the issues.”
The party also asked for a $200 million cap on the amount issuers can raise and additional investor protections.
Some crypto supporters like venture capitalist Nic Carter viewed the above demands as “pretty reasonable.”
But the stablecoin yield, ethics targeting the Donald Trump family, and software developer protection were key unresolved issues.
In fact, regarding the stablecoin yield, the crypto industry has vowed not to back down, calling it a “national security” issue as China moves to undercut U.S. dominance in the sector.
U.S elections factor
But the 2026 elections could affect the bill’s momentum.
According to investment bank TD Cowen, the Democrats aren’t incentivized to swiftly pass the bill as they believe they may regain control after the November elections. In fact, Trump is worried that he could be impeached if Republicans lose House control.
Jaret Seiberg, managing director of TD Cowen’s Washington research arm, noted in a recent client update that Trump’s conflict of interest topic could delay it by three years.
“We do not believe Democrats would accept this deal unless it also pushed the rest of the bill out three years.”
That said, the overall odds of passage per prediction site Kalshi were 79% before 2027 and 49% before May.
Final Thoughts
- The Senate Banking Committee is set to markup the crypto market structure bill on January 15, despite Democrats’ hardline stance on DeFi.
- The chance of the bill’s passage was nearly 50/50 before May, but elections could impact its momentum.
