Source: The Block
Original Title: Midterms, shutdown risks and negotiations: Can Congress pass a sweeping crypto bill in 2026?
Compiled and Edited by: BitpushNews
The coming year is crucial for cryptocurrency legislation, with the core question being whether lawmakers can pass a comprehensive digital asset regulatory bill before the midterm elections.
Crypto advocates who spoke with The Block estimate the probability of such a bill becoming law in 2026 is between 50% and 60%. Optimism stems from ongoing discussions between Democrats and Republicans, but several thorny issues remain unresolved.
Anchorage Digital's Policy Director Kevin Wysocki puts the odds of the bill passing and becoming law in 2026 at 50%.
"I think what's really favorable is that the members—Republicans and Democrats—are talking frequently, which is a very positive signal," he told The Block. "Some of the issues still [under debate] are difficult, and the legislation itself covers banking law, securities law, commodity law—so it's complex."
Legislative Process and Current Status
Senate lawmakers are working on a comprehensive bill aimed at regulating the cryptocurrency industry. The Senate Banking Committee has a draft that seeks to delineate jurisdiction between the two main federal agencies—the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)—and create a new category for "ancillary assets" to clarify which cryptocurrencies are not securities. Meanwhile, the Senate Agriculture Committee, which oversees the CFTC, released its own draft legislation last month, which would grant the agency new powers. The versions from both committees need to be integrated and unified.
There was previously optimistic expectation that the Senate Banking Committee would hold a hearing by the end of the year to amend and vote on the bill, but this hope has faded. However, a spokesperson for the Senate Banking Committee stated they are now aiming to "mark up" the bill in 2026, noting progress has been made with Democrats.
The spokesperson said: "Chairman Scott and the Senate Banking Committee have made significant progress with Democratic colleagues in advancing bipartisan digital asset market structure legislation. The Committee is continuing negotiations and looks forward to a markup in early 2026."
Key Controversies
Sources indicate there are several pain points in the crypto market structure bill that need to be resolved.
Regulation of Interest-Bearing Stablecoins
One flashpoint is the tension between banks and crypto companies over how to regulate interest-bearing stablecoins.
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Banking Industry's Stance: Banking trade groups argue that the GENIUS Stablecoin Act, which became law this summer, failed to address key loopholes. They contend the regulations did not sufficiently prohibit issuers from offering interest on stablecoins. They warn that this omission could turn stablecoins into savings and credit tools rather than simple payment instruments, thereby introducing so-called "distorted market incentives" for traditional banks.
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Crypto Industry's Stance: In contrast, crypto advocates argue that the ability to offer yields on stablecoins simply represents fair and healthy competition.
DeFi Regulation and Jurisdictional Division
Chamber of Digital Commerce CEO Cody Carbone pointed out another issue is how to regulate decentralized finance, particularly regarding anti-money laundering for DeFi protocols, and which agency—the SEC or CFTC—should have jurisdiction over certain tokens. He added that, given the SEC's more critical stance towards crypto under former Chairman Gary Gensler, the industry is concerned about the SEC being the decider.
"I would say, from what I understand from the industry, if the legislation says the SEC is going to be the primary decider of whether a token is a security or a commodity, that is very concerning because it looks a lot like going down the Gary Gensler path, where the SEC is the only cop on the beat deciding everything," Carbone said.
Trump's Conflicts of Interest
Another issue in the crypto market structure bill involves President Donald Trump's conflicts of interest in the cryptocurrency space. Bloomberg estimated in July that the current president profits approximately $620 million from his family's crypto businesses, including World Liberty Financial DeFi and a stablecoin project that lists Trump and his three sons as co-founders. The family also owns a 20% stake in the bitcoin mining company American Bitcoin. Lawmakers have also repeatedly expressed concern about the freely circulating TRUMP and MELANIA meme coins launched the weekend before his inauguration.
Republican Senator Cynthia Lummis, who has been involved in the Senate bill negotiations, said at the Blockchain Association's Policy Summit in Washington, D.C., in December that the White House had been involved in discussions about ethics provisions. Lummis said she and Democratic Senator Ruben Gallego submitted text of the provisions to the White House, but it was sent back.
CFTC Vacancies
Carbone said vacancies on the CFTC commission are also under scrutiny and have become a powerful negotiating tool for Democrats.
Over the past year, four CFTC commissioners—Democrats Kristin Johnson and Christy Goldsmith Romero, and Republicans Caroline Pham and Summer Mersinger—have left the agency or announced plans to depart. Republican Pham is currently the acting chair, but she has said she plans to leave once new CFTC Chairman Mike Selig is confirmed. This leaves the agency, which is expected to have broader jurisdiction over crypto, with only one Republican commissioner.
"I don't think any senator wants to give that much power to this small agency that currently has one chair [when it should be a five-person commission]," Carbone said.
Looming Elections and Time Pressure
Sources said the Senate's next moves will be critical. Carbone stated that once the Senate Banking Committee's bill is ready, voted on by the committee, and advanced, it will need to be merged with the Senate Agriculture Committee's version and voted on by the full Senate.
Then, the Senate's crypto market structure bill would need to be reconciled with the version passed by the House this summer (called the Clarity Act).
"There are still too many steps to complete," Carbone said.
Carbone said he would be concerned if the Senate's bill markup does not happen in January.
"They need to show progress right out of the gate," Carbone said. "So, if I see markups in both committees, see a compromise bill emerge in the Senate, and there's a potential for a full Senate vote in the next six weeks, then I'd feel very good. If none of that happens in January, I'd be very pessimistic."
Then come the midterm elections, and some lawmakers will focus on their campaigns.
Anchorage's Kevin Wysocki said lawmakers have roughly the first half of next year to pass a crypto market structure bill before the election season takes over.
"In terms of timeline, I think we're looking at the first half of next year, before members really get focused on electioneering," he said. "And then, maybe around the holidays at the end of 2026, after the election, there's a small window of opportunity to push this legislation."
Saga CEO Rebecca Liao (a former member of U.S. President Joe Biden's 2020 presidential campaign team) said some Senate Democrats are indeed enthusiastic about the crypto market structure bill and want to see it pass. However, having enough time is a challenge as they face midterm elections and another budget discussion. Congress ended a 43-day government shutdown in November by temporarily funding the government. That funding lasts until January 30, 2026, but if a funding agreement is not reached again, the government will shut down again, halting work on the crypto market structure bill.
Rebecca Liao said that as the midterm elections approach, Trump's crypto conflicts of interest may receive more attention.
"We see Democrats forming a message around 'affordability,' so anything that smacks of privilege or improper gains by the president and his administration will be hammered in Democratic messaging," she said.
As for what happens if lawmakers ultimately fail to pass the crypto market structure bill into law in 2026, Rebecca Liao said something must be done, especially given that financial institutions have already entered the digital asset space.
"For cryptocurrency to be truly adopted and used at scale, you really need regulatory clarity, so I think people will push for it again," she said.
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