Midterms, shutdown risks and negotiations: Can Congress pass a sweeping crypto bill in 2026?

Quick Take

• Crypto advocacy sources who spoke with The Block gave a range of 50% to 60% chance of such a bill becoming law in 2026.
• There had been some optimism that the Senate Banking Committee would hold a hearing to amend and vote on the bill before the end of the year, but those spirits were dashed.
• What happens next in the Senate is going to be really pivotal, sources said.

The next year is set to be pivotal for cryptocurrency legislation, with the big question being whether lawmakers can pass an all-encompassing bill to regulate digital assets before the midterms.

Crypto advocacy sources who spoke with The Block gave a range of 50% to 60% chance of such a bill becoming law in 2026. Optimism lies in ongoing discussions between Democrats and Republicans, but there are still several issues that need ironing out.

Kevin Wysocki, head of policy at Anchorage Digital, gave a bill’s chance of passing into law in 2026 a 50% chance.

“I think what’s really good is that members of Congress are talking quite a bit between Republicans and Democrats, so that’s a very positive sign,” he told The Block. “Some of the issues that are still [debated] are difficult, and the legislation itself encompasses banking laws, securities law, commodity law — so it’s complicated.”

Lawmakers in the Senate are tackling an all-encompassing bill that seeks to regulate the crypto industry at large. The Senate Banking Committee has a draft that looks to allocate jurisdiction between two main federal agencies — the Securities and Exchange Commission and the Commodity Futures Trading Commission — as well as create a new term for “ancillary assets” to clarify which cryptocurrencies are not securities. Meanwhile, the Senate Agriculture Committee, which oversees the CFTC, has drafted legislation it released last month that would give new authority to that agency. Both committee versions of the bill would need to be reconciled.

There had been some optimism that the Senate Banking Committee would hold a hearing to amend and vote on the bill before the end of the year, but those spirits were dashed. However, a Senate Banking Committee spokesperson said they are now looking to markup the bill early on in the new year and noted progress had been made with Democrats.

“Chairman Scott and the Senate Banking Committee have made strong progress with Democratic counterparts on bipartisan digital asset market structure legislation,” the spokesperson said. “The Committee is continuing to negotiate and looks forward to a markup in early 2026.”

The sticking points

There are several pain points in the crypto market structure bill that need to be addressed, sources said.

One flashpoint has been tension between banks and crypto companies on how yield-bearing stablecoins should be regulated.

Banking trade groups say that the stablecoin legislation known as GENIUS, which became law over the summer, leaves key loopholes unaddressed. In particular, they argue that the statute does not sufficiently bar issuers from offering interest on stablecoins. That omission, they warn, could turn stablecoins into vehicles for savings and credit rather than simple payment tools, introducing what they describe as “distorting market incentives” for traditional banks.

Crypto advocates, by contrast, say the ability to offer yield on stablecoins represents nothing more than fair and healthy competition.

Another issue has been how to regulate decentralized finance, specifically how to regulate DeFi protocols in terms of anti-money laundering concerns and whether some tokens should be under the jurisdiction of the SEC or CFTC, said The Digital Chamber CEO Cody Carbone. There is concern that the SEC would be the decision maker, given the agency’s former more critical stance of crypto under former SEC Chair Gary Gensler, he added.

“I will say that I know from industry, it is very worrisome to have legislation that says the SEC will be the first decision maker whether a token is a security or commodity because that looks a lot like going down the Gary Gensler route, where the SEC is the only cop on the street and is deciding everything,” Carbone said.

Another issue in the crypto market structure bill is around President Donald Trump’s conflicts of interest in crypto. Bloomberg estimated in July that the sitting president has profited some $620 million from his family’s crypto ventures, including the World Liberty Financial DeFi and stablecoin project, which lists Trump and his three sons as co-founders. The family also has a 20% stake in the mining firm American Bitcoin, and legislators have repeatedly raised concerns about the free-floating TRUMP and MELANIA memecoins launched the weekend before Trump took office.

Sen. Cynthia Lummis, R-Wyo., who has been involved in the negotiations on passing a bill in the Senate, said in December at the Blockchain Association Policy Summit in Washington, D.C., that the White House had been involved in language around ethics. Lummis said she and Democratic Sen. Ruben Gallego sent over language to the White House, but it was kicked back.

The absence of commissioners at the CFTC has also come under scrutiny and has become a solid negotiating tool for Democrats, Carbone said.

Over the past year, four CFTC commissioners — Democrats Kristin Johnson and Christy Goldsmith Romero, as well as Republicans Caroline Pham and Summer Mersinger — have left the agency or announced plans to do so. Pham, a Republican, is now acting chair but has said she plans to leave once a new CFTC chair, Mike Selig, is confirmed.

That leaves the agency, which is set to have broader jurisdiction over crypto, with one Republican commissioner.

“I don’t think any senator wants to hand over so much power to this small agency that only has a chair when it’s supposed to be a five-member commission,” Carbone said.

Looming elections

What happens next in the Senate is going to be really pivotal, sources said. Once the Senate Banking Committee has its bill in place and is then voted on and advanced out of the committee, it needs to be combined with the Senate Agriculture Committee’s version and voted on by the full Senate, Carbone said.

Then, the Senate crypto market structure bill needed to reconcile with the House version, called Clarity, which passed out of the full House over the summer.

“There’s just so many steps that still need to happen,” Carbone said.

If markups for bills in the Senate don’t happen in January, Carbone said he would be worried.

“They just need to show progress right out of the gate,” Carbone said. “So if I see a markup in both committees and I see a compromise bill in the Senate and we’ve got a potential Senate floor vote in the next six weeks, then I’m feeling very good,” he said. “If we don’t have those things in January, I’m feeling very pessimistic.”

And then come the midterm elections, as some lawmakers focus on their own races.

Lawmakers have about the first half of next year to pass a crypto market structure bill before election season takes hold, Anchorage’s Kevin Wysocki said.

“In terms of timeline, I think we’re looking at the first two quarters of next month before members are really focused on election matters,” he said. “And then maybe there’s a small window of opportunity around the holidays at the end of 2026 to move this legislation post-election.”

Some Senate Democrats are really passionate about a crypto market structure bill and want to see it passed, said Saga CEO Rebecca Liao. Liao was also a member of former President Joe Biden’s 2020 presidential campaign.

However, having enough time is a challenge as they face midterm elections and another budget discussion, she said. Congress temporarily funded the government following a 43-day shutdown that ended in November. That funding extends through Jan. 30, 2026, but if funding isn’t agreed to again, the government will shut down again, putting a pause on work on a crypto market structure bill.

The closer midterm elections get, the more Trump’s crypto conflicts of interest could come into the spotlight, Liao said.

“We’re seeing a real Democratic message coalescing around affordability, and so anything that smacks of privilege or unjustified gains by the president or the people in his administration, all of that is going to be hammered time and again in Democratic messaging,” she said.

As for what happens if lawmakers are ultimately not able to pass a crypto market structure bill into law in 2026, Liao said something has to get done, especially as financial institutions have gotten into digital assets.

“In order for crypto to actually get to adoption and mass utilization, you really do need regulatory clarity, and so I think people will push for it again,” she said.

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