The 2026 Crypto Legislation Window Narrows: Will US Regulatory Reforms Be Implemented as Scheduled?

2026 will be a critical year for the US cryptocurrency industry. Not only will it determine who will lead the country, but it will also decide whether the digital asset regulatory framework can truly take shape. According to industry insiders, the probability of this comprehensive crypto market structure bill becoming law next year is estimated to be between 50% and 60%.

Legislative Deadlock: The Double Blow of Time and Divergence

The current crypto regulation legislation being advanced by the Senate involves complex coordination across multiple levels. The Senate Banking Committee is drafting a bill aimed at clarifying the boundary of powers between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), and creating a new classification system for certain digital assets. Meanwhile, the Senate Agriculture Committee, responsible for overseeing the CFTC, is independently developing its own version, granting the agency additional authority. These two proposals will ultimately need to be unified into one.

Initially, optimistic expectations were that the Senate Banking Committee could hold a vote to amend the bill by the end of the year, but this timetable has already been missed. The current goal is to “review” the bill in early 2026. A Senate Banking Committee spokesperson confirmed that significant progress has been made with Democrats, and negotiations are ongoing, with hopes for some advancement at the start of the new year.

However, the real issue is that even if the Senate passes the bill, it must be coordinated with the version passed by the House of Representatives (the “Clear Bill”) this year. The entire process involves multiple committee votes, a full Senate vote, and then resolving differences between the House and Senate. Such a cumbersome process, coupled with the timing of midterm elections, makes the legislative window extremely narrow.

The “Dark War” Over Yield-Bearing Stablecoins

The most explosive divergence lies in the regulation of yield-bearing stablecoins. The banking industry and the crypto sector hold completely opposing views.

Banking trade groups insist that the “GENIUS Stablecoin Act” passed last summer has critical loopholes—specifically, it fails to effectively restrict stablecoin issuers from offering interest. They claim this paves the way for stablecoins to evolve into savings tools, creating “distorted market incentives” that harm the traditional financial system and lead to unfair competition.

The crypto industry, on the other hand, takes the opposite stance: equipping stablecoins with yield features is fundamentally a sign of healthy competition and should not be banned. Both sides hold firm, using this as leverage in their negotiations.

Jurisdiction Dilemma: Who Decides?

Cody Cabbage, CEO of the Digital Chamber of Commerce, pointed out that another deep divergence revolves around how DeFi is regulated—particularly how anti-money laundering rules apply to decentralized protocols, and whether a token falls under SEC or CFTC jurisdiction.

This seemingly technical issue actually conceals a deep power struggle. The key question is: who has the final say? Cabbage expressed genuine industry concerns—if the SEC is granted primary decision-making authority over token classification, it would be a replay of the “Gensler era,” only with different names. Gensler, during his tenure, was widely seen as taking a tough stance on crypto, and industry fears that the new power structure will still favor strict regulation.

The Trump Effect: The Ghost of Conflicts of Interest

An unavoidable topic is President Donald Trump’s substantial financial interests in the crypto space. According to Bloomberg’s July estimate, Trump and his family have profited about $620 million from crypto-related businesses. This includes World Liberty Financial (a DeFi and stablecoin project co-founded by Trump and his three sons), and a 20% stake in the American Bitcoin Company. More controversially, Trump has also launched meme coins called TRUMP and MELANIA, raising widespread legislative concerns.

These significant interests create subtle pressure on legislation. Republican Senator Cynthia Lummis, involved in negotiations, revealed that the White House has been involved in discussions about moral clauses. Lummis and Democratic Senator Ruben Gallego had submitted draft texts to the White House, but they were returned unaltered.

From the Democratic perspective, with midterm elections approaching, the issue of “accountability” is becoming a key part of their messaging. Any information suggesting the President or his officials might have gained illicit benefits will be repeatedly wielded as a weapon against opponents. This adds an extra layer of political risk to the legislation.

Institutional Personnel Crisis: The Hidden Danger of a Power Vacuum

Another overlooked but equally deadly issue is the vacancy of CFTC commissioners. Over the past 12 months, four commissioners have resigned or announced their departure, including two Democrats and two Republicans. Carolyn C. Pham is currently serving as acting chair but has stated she will step down once President Michael S. C. Selig is confirmed. This means the agency, which will have broader jurisdiction over crypto, currently has only one Republican commissioner.

Cabbage pointed out that no senator is willing to entrust such significant power to an agency with a full docket and severe commissioner shortages. The agency was designed to have a five-member leadership team, but it is now effectively leaderless. Democrats are exploiting this loophole as a strong bargaining chip, further complicating negotiations.

Critical Moment: The First Half of 2026 Is the Last Chance

Industry insiders have a clear consensus: time is extremely tight. Once the Senate Banking Committee’s bill is ready and passes a committee vote, it must be merged with the Agriculture Committee’s version, then go through a full Senate vote. After that, it must be coordinated with the House version—a marathon process.

Kevin Weso, Policy Director at Anchorage Digital, said lawmakers have roughly until the first half of next year to complete all this. “Once we enter election season, legislators will be fully occupied with their campaigns,” he said. “There’s only a small window before the end of 2026, around the holidays, but by then it will be after the elections.”

Cabbage issued a more explicit warning: if the review by the Senate committees does not start in January, he will feel deeply pessimistic. “I need to see both committees conduct reviews, see a compromise bill emerge in the Senate, and possibly hold a full Senate vote within the next six weeks. If we don’t see progress by January, it will be really problematic.”

Budget Risks: The Potential Threat of a Government Shutdown

Another often overlooked risk factor is the government shutdown. After a 43-day shutdown, Congress provided temporary funding until January 30, 2026. If no funding agreement is reached by then, the government will shut down again—completely halting all work, including crypto legislation.

Rebecca Liao, CEO of Saga and a former member of Biden’s 2020 presidential campaign team, pointed out that some Democratic Senate members are enthusiastic about the crypto market structure bill, but under the dual pressures of midterm elections and budget negotiations, mobilizing enough resources remains a challenge.

The Final Reason: Why Push Forward?

Liao added that even if this legislation ultimately fails, the industry will push for it again. The reason is simple: for cryptocurrencies to achieve true adoption and scalable applications, regulatory clarity is an indispensable prerequisite. As more financial institutions enter the digital asset space, the ambiguous regulatory framework has become a bottleneck for development.

In other words, the legislative window in 2026 may be the last reasonable opportunity. Missing it could make progress difficult in the coming years.