Original Title: Midterms, shutdown risks and negotiations: Can Congress pass a sweeping crypto bill in 2026?
Original Author: Sarah Wynn, The Block
Original Translation: Bitpush News
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.
Cryptocurrency advocates who spoke with 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 still need to be resolved.
Kevin Wysocki, policy director at Anchorage Digital, believes the chances of the bill passing into law in 2026 are 50%.
"I think what’s really beneficial is that members of Congress—both Republicans and Democrats—are communicating frequently, which is a very positive sign," he told The Block. "Some of the issues that are still being debated 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 aims to delineate jurisdiction between 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 do not fall under securities. Meanwhile, the Senate Agriculture Committee, which oversees the CFTC, also released its own draft legislation last month that would grant the agency new powers. The versions from both committees need to be integrated into a unified bill.
There had been 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 "finalize" the bill in early 2026 and noted that progress has been made with the Democrats.
The spokesperson said, "Chairman Scott and the Senate Banking Committee have made significant progress with their Democratic counterparts in advancing bipartisan digital asset market structure legislation. The committee continues to negotiate and looks forward to finalizing in early 2026."
Points of Contention
Sources indicate that there are several pain points in the cryptocurrency market structure bill that need to be addressed.
Regulation of Yield-Generating Stablecoins
One flashpoint is the tension between banks and cryptocurrency companies over how to regulate yield-generating stablecoins.
Banking Industry Position: Banking trade groups argue 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 offering interest on stablecoins. They warn that this omission could turn stablecoins into savings and credit tools rather than simple payment instruments, introducing what they call "distorted market incentives" for traditional banks.
Cryptocurrency Industry Position: In contrast, cryptocurrency advocates argue that the ability to offer yield on stablecoins merely represents fair and healthy competition.
DeFi Regulation and Jurisdictional Divisions
Cody Kaban, CEO of the Digital Chamber, pointed out that another issue is how to regulate decentralized finance (DeFi), particularly regarding anti-money laundering measures for DeFi protocols, 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 Chairman Gary Gensler, there are concerns that the SEC will become the final arbiter.
"What I would say is that from what I’ve learned from the industry, 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 because it looks a lot like following Gary Gensler's old path, where the SEC is the only cop on the street deciding everything," Kaban 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 current president has profited about $620 million from his family's crypto ventures, including the World Liberty Financial DeFi and 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 expressed concerns about Trump's free-floating TRUMP and MELANIA meme coins launched the weekend before his inauguration.
Republican Senator Cynthia Lummis, who has been involved in Senate bill negotiations, stated in December at the Blockchain Association policy summit in Washington, D.C., that the White House has been involved in discussions about ethical provisions. Lummis said she and Democratic Senator Ruben Gallego submitted text for the provisions to the White House, but it was returned.
CFTC Personnel Vacancies
Kaban noted that the vacancies among CFTC commissioners are also under scrutiny and have become a powerful bargaining chip 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 indicated that she plans to step down once the new CFTC chair, Mike Selig, is confirmed. This leaves the agency, which is expected to have broader jurisdiction over cryptocurrencies, with only one Republican commissioner.
"I don’t think any senator wants to give such significant power to this small agency, which currently has only one chair (when it should be a five-member commission)," Kaban said.
Upcoming Elections and Time Pressure
Sources say that the Senate's next actions will be critical. Kaban stated that once the Senate Banking Committee's bill is ready, after committee voting and advancement, it will need to be merged with the version from the Senate Agriculture Committee and then voted on by the full Senate.
Then, the Senate's cryptocurrency market structure bill will also need to be reconciled with the version passed by the House this summer (known as the "Clarity Act").
"There are still too many steps to complete," Kaban said.
Kaban expressed concern that if the Senate's bill is not finalized in January, he would be worried.
"They need to show progress right out of the gate," Kaban said. "So, if I see both committees have finalized, see a compromise bill emerge from the Senate, and we have a potential full Senate vote in the next six weeks, then I would feel very good. If there are no such developments in January, I would feel very pessimistic."
Then 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 before the election season takes over.
"In terms of the timeline, I think we’re looking at the first half of next year, and then members will really focus on election matters," he said. "Then, perhaps around the holidays at the end of 2026, after the elections, there might be a small window of opportunity to push this legislation."
Rebecca Liao, CEO of Saga (who was a member of former President Joe Biden's 2020 presidential campaign team), noted that some Senate Democrats are indeed enthusiastic about the cryptocurrency market structure bill and want 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 a 43-day shutdown in November. This funding will last until January 30, 2026, but if a funding agreement 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 come under greater scrutiny.
"We see Democrats forming a real message around 'affordability,' so anything that has a privileged tint or suggests improper gains for the president and his administration will be repeatedly attacked in Democratic messaging," she said.
As for what would happen if lawmakers ultimately fail to pass the cryptocurrency market structure bill into law in 2026, Rebecca Liao emphasized that action must be taken, especially considering that financial institutions have already entered the digital asset space.
"In order for cryptocurrencies 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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