Original title: Midterms, shutdown risks and negotiations: Can Congress pass a sweeping crypto bill in 2026?
Original author: Sarah Wynn, The Block
Original compilation: Bitpush News
The next year is crucial for cryptocurrency legislation, with the core issue being whether lawmakers can pass a comprehensive digital asset regulatory bill before the midterm elections.
Crypto advocates who spoke to The Block estimate that the likelihood of such a bill becoming law in 2026 is between 50% and 60%. The optimism stems from ongoing discussions between Democrats and Republicans, but several tricky issues remain to be resolved.
Kevin Wysocki, the policy head at Anchorage Digital, believes the likelihood of the bill becoming law in 2026 is 50%.
‘I think it’s really beneficial that members of Congress—both Republicans and Democrats—are communicating frequently, which is a very positive signal,’ he told The Block. ‘Some of the issues still being [debated] are difficult, and the legislation itself covers banking law, securities law, commodity law—so it’s complex.’
Legislative process and current situation
Senators are working to draft a comprehensive bill aimed at fully regulating the cryptocurrency industry. The Senate Banking Committee has a draft that seeks to delineate jurisdiction between two major 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 do not fall under securities. Meanwhile, the Senate Agriculture Committee, which oversees the CFTC, also released its own draft legislative bill last month that would grant the agency new powers. The versions from the two committees need to be unified.
There were earlier optimistic expectations that the Senate Banking Committee would hold hearings to amend and vote on the bill by the end of the year, but that hope has faded. However, a spokesperson for the Senate Banking Committee stated that they are now seeking to conduct a ‘review’ of the bill in early 2026 and noted that they have made progress with the Democrats.
A spokesperson said: ‘Chair Scott and the Senate Banking Committee have made significant progress in pushing bipartisan digital asset market structure legislation alongside their Democratic counterparts. The committee is continuing negotiations and looks forward to a review in early 2026.’
Point of contention
Insiders say there are several pain points in the cryptocurrency market structure bill that need to be addressed.
Regulation of interest-bearing stablecoins
A flashpoint is the tension between banks and cryptocurrency companies regarding how to regulate interest-bearing stablecoins.
· Banking industry stance: Banking trade groups indicated that the (GENIUS Stablecoin Act), which became law this summer, failed to address key loopholes. They believe the regulation does not adequately prohibit issuers from providing interest on stablecoins. They warned that this omission could turn stablecoins into savings and credit instruments rather than simple payment tools, introducing so-called 'distorted market incentives' for traditional banks.
· Cryptocurrency industry stance: In contrast, cryptocurrency advocates believe that the ability to provide interest on stablecoins merely represents fair and healthy competition.
DeFi regulation and jurisdictional delineation
Cody Kabon, CEO of the Digital Chamber, pointed out that another issue is how to regulate decentralized finance, particularly how to oversee DeFi protocols in terms of anti-money laundering, and whether certain tokens should fall under the jurisdiction of the SEC or the CFTC. He added that given the SEC's more critical stance on cryptocurrencies under former Chair Gary Gensler, there are concerns that the SEC will become the decision-maker.
‘What I want to say is that I’ve learned from the industry that if the legislation stipulates that the SEC will be the primary decision-maker on whether a token is a security or a commodity, that is very concerning, as it seems to follow Gary Gensler's old path, where the SEC is the only cop on the street making all the decisions,’ Kabon said.
Trump's conflicts of interest
Another issue in the cryptocurrency market structure bill involves President Donald Trump's conflicts of interest in the cryptocurrency space. Bloomberg estimated in July that the sitting president profits approximately $620 million from his family's cryptocurrency ventures (including the World Liberty Financial DeFi and stablecoin project, which 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 concerns about Trump's launch of the freely circulating TRUMP and MELANIA meme coins over the weekend before his inauguration.
Republican Senator Cynthia Lummis, who has been involved in Senate bill negotiations, stated in December at a blockchain association policy summit in Washington D.C. that the White House has participated in discussions about ethical provisions. Lummis said she and Democratic Senator Ruben Gallego submitted the text of the provisions to the White House, but it was returned.
CFTC personnel vacancies
Kabon stated that the vacancies among CFTC commissioners are also under scrutiny and have become a powerful negotiating tool for Democrats.
In 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 do so. Republican Pham is currently acting chair, but she stated that once the new CFTC Chair, Mike Selig, is confirmed, she plans to step down. This leaves the agency, which is expected to have broader jurisdiction over cryptocurrencies, with only one Republican commissioner.
‘I don’t think any senator is willing to give such significant power to this small agency that currently has only one chair (when it should be a five-person commission),’ Kabon said.
Impending elections and time pressure
Insiders say the next actions in the Senate will be crucial. Kabon noted that once the Senate Banking Committee's bill is ready, it will need to be merged with the version from the Senate Agriculture Committee after a committee vote and advancement, followed by a vote from the full Senate.
Then, the Senate's cryptocurrency market structure bill will also need to be coordinated with the version passed by the House this summer (referred to as the (Clarity Act)).
‘There are still too many steps to complete,’ Kabon said.
Kabon stated that he would be concerned if the Senate's review of the bill does not occur in January.
‘They need to show progress right from the start,’ Kabon said. ‘So, if I see both committees have conducted reviews, see a compromise bill from the Senate, and we might have a full Senate vote in the next six weeks, then I will feel very good. If there is no progress by January, I will feel very pessimistic.’
Next comes the midterm elections, during which some lawmakers will focus on their campaigns.
Kevin Wysocki of Anchorage stated that lawmakers have about the first half of next year to pass a cryptocurrency market structure bill, after which the election season will dominate.
‘In terms of the timeline, I think our focus is on the first half of next year, after which lawmakers will really concentrate on election matters,’ he said. ‘Then, perhaps around the end of the 2026 holiday season, there may be a small window of opportunity to push this legislation forward after the elections.’
Saga CEO Rebecca Liao (a former member of U.S. President Joe Biden's 2020 presidential campaign team) stated that some Senate Democrats are indeed enthusiastic about the cryptocurrency market structure bill and hope to see it passed. However, having enough time is a challenge as they face the midterm elections and another budget discussion. Congress temporarily funded the government after ending a 43-day shutdown in November. This funding will last until January 30, 2026, but if a funding deal fails to be reached again, the government will shut down again, halting work on the cryptocurrency market structure bill.
Rebecca Liao stated that as the midterm elections approach, Trump's conflicts of interest in cryptocurrency may receive more attention.
‘We see Democrats forming a real narrative around ‘affordability’, so anything that implies privileged connotations or improper profits for the president and his administration will be repeatedly criticized in Democratic messaging,’ she said.
As for what will happen if lawmakers ultimately fail to pass the cryptocurrency market structure bill into law by 2026, Rebecca Liao indicated that action must be taken, especially considering that financial institutions have already entered the digital assets space.
‘To truly adopt and widely use cryptocurrency, you indeed need regulatory clarity, so I think people will push for it again,’ she said.
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