Countdown to Midterm Elections: Will the US Crypto Bill Pass the Test?

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 upcoming year is crucial for cryptocurrency legislation, with the central question being whether legislators can pass a comprehensive digital asset regulatory bill before the midterms.

Cryptocurrency advocates interviewed by The Block estimate the likelihood of such a bill becoming law in 2026 to be between 50% and 60%. The optimism stems from ongoing discussions between Democrats and Republicans, but there are still several thorny issues to resolve.

Kevin Wysocki, Head of Policy at Anchorage Digital, believes there is a 50% chance of the bill becoming law in 2026.

“I think what's really positive is that members of Congress—between Republicans and Democrats—are in frequent communication, which is a very positive signal,” he told The Block. “Some of the issues that are still [in contention] are difficult, and the legislation itself covers banking law, securities law, commodity law—so it's complex.”

Legislative Process and Current Status

Lawmakers in the Senate are working on crafting a comprehensive bill aimed at regulating the cryptocurrency industry as a whole. The Senate Banking Committee has a draft that seeks to delineate jurisdiction between two key federal agencies—the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC)—and create a new category for “complementary 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 give the agency new powers. The versions from the two committees need to be reconciled.

There were previously optimistic expectations that the Senate Banking Committee would hold a hearing and amend and vote on the bill before the end of the year, but that hope has since waned. However, a spokesperson for the Senate Banking Committee said they are now aiming to “mark up” the bill early in 2026 and noted progress with the Democratic side.

Spokesperson stated: "Chairman Scott and the Senate Banking Committee have made significant progress with their Democratic colleagues in advancing bipartisan digital asset market structure legislation. The Committee is continuing negotiations and looks forward to markup in early 2026."

Key Points of Contention

Sources report several pain points that need to be addressed in the cryptocurrency market structure bill.

Regulation of Interest-Bearing Stablecoins

One flashpoint is the tension between banks and cryptocurrency firms over how to regulate interest-bearing stablecoins.

· Banking Industry Position: Banking industry trade groups have expressed concerns that this summer's passage of the GENIUS Stablecoin Act into law failed to address key loopholes. They believe the regulation inadequately prohibits issuers from providing interest on stablecoins. They warn that this omission could turn stablecoins into savings and loan tools rather than straightforward payment mechanisms, introducing what traditional banks describe as "distorted market incentives."

· Crypto Industry Position: In contrast, cryptocurrency advocates argue that the ability to offer returns on stablecoins merely reflects fair and competitive practices.

DeFi Regulation and Jurisdictional Divides

Crypto Chamber CEO Cody Cabana pointed out another issue is how to regulate decentralized finance, particularly in terms of AML for DeFi protocols, and whether certain tokens should fall under SEC or CFTC jurisdiction. He added that given the SEC's more critical stance towards cryptocurrencies under former Chair Gary Gensler's leadership, the industry is concerned the SEC might become the ultimate decision-maker.

"What I'll say is, what I've heard from the industry is that if legislation mandates that the SEC is the primary decider on whether a token is a security or a commodity, that's very concerning because it looks like a return to Gary Gensler's old ways, where the SEC is the only cop on the beat, deciding everything," Cabana 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 cryptocurrency ventures (including the World Liberty Financial DeFi and Stablecoin project, where Trump and his three sons are listed as co-founders) and owns a 20% stake in the Bitcoin mining company American Bitcoin. Lawmakers have also expressed concerns multiple times about the free-floating TRUMP and MELANIA meme coins launched over a weekend prior to Trump taking office.

Republican Senator Cynthia Lummis, who has been involved in Senate bill negotiations all along, said in December at the Blockchain Association Policy Summit in Washington, D.C. that the White House has been engaged in discussions regarding the ethics provision. Lummis said she and Democratic Senator Rubén Gallego submitted draft language to the White House, but it was sent back.

CFTC Personnel Vacancy

Kaban stated that the vacancy of CFTC commissioners has also come under scrutiny and has become a strong bargaining chip for Democrats.

Over the past year, four CFTC commissioners—Democrats Rostin Behnam and Dan Berkovitz, and Republicans Dawn Stump and Brian Quintenz—have either left the agency or announced plans to depart. Republican Stump currently serves as acting chair, but she has indicated that once the new CFTC Chairman, Maureen Ohlhausen, is confirmed, she intends to depart. 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 cede such power to what’s currently a single chair, and should have been a [five-member] commission,” Kaban said.

Looming Election and Time Pressure

Sources said the Senate’s next steps will be crucial. Kaban said that once the Senate Banking Committee bill is ready, voted on in committee, and brought forward, it will need to be reconciled with the Senate Agriculture Committee’s version and voted on by the full Senate.

Then, the Senate’s crypto market structure bill will also need to be harmonized with the version passed by the House earlier this summer (known as the CLEAR Act).

“There are way too many steps that need to happen,” Kaban said.

Kaban said he would be concerned if the Senate’s bill does not come together in January.

“They need to show progress out the gate,” Kaban said. “So, if I see both committees mark up, if I see a compromise bill come out of the Senate, and I see a path to get to a Senate floor vote in the next six weeks, then I feel really good. If I don’t see those things in January, I feel really pessimistic.”

Next comes the midterms, with some lawmakers focusing on their own campaigns.

Kevin Wysocki of Anchorage said lawmakers have about the first half of next year to get a crypto market structure bill passed before election season takes over.

“In terms of the calendar, I think we’re focusing on the first half of next year, and then the legislators will really be focused on election matters,” he said. “Then maybe around the holidays at the end of 2026, there might be a little window of opportunity after the election to push this legislation through.”

Saga CEO Rebecca Liao (formerly of Joe Biden's 2020 presidential campaign team) said that some Senate Democrats are indeed enthusiastic about the crypto market structure bill and hope to see it pass. However, they face a challenge in having enough time as they approach the midterm elections and another budget debate. Congress temporarily funded the government after a 43-day shutdown in November, providing funding until January 30, 2026. If a funding agreement is not reached again, the government would shut down once more, pausing work on the crypto market structure bill.

Rebecca Liao noted that as the midterm elections approach, Trump's crypto interests could come under more scrutiny.

“We see Democrats coalescing around a narrative on ‘affordability,’ so anything with a tinge of privilege or undue enrichment for the president and his administration will be hammered home in Democratic messaging,” she said.

As for what would happen if legislators ultimately fail to pass the crypto market structure bill into law in 2026, Rebecca Liao said action must be taken, especially considering financial institutions have entered the digital asset space.

“For cryptocurrencies to truly gain adoption and mainstream use, you really need regulatory clarity, so I think people will push for it again,” she said.

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