US Crypto Regulation Project Proposal: Will it support 2026?

Let’s enter a meaningful era for the digital asset industry. The US proposed crypto regulation project is becoming clearer and is closer to becoming a reality. The question is no longer if action is needed, but when it will become law and how it will be launched into the market.

Based on discussions in Congress and the Executive Branch, the key elements of the market structure proposal have already gained bipartisan support. The remaining obstacles are political bottlenecks, pending agency confirmations, and some unresolved regulatory issues. But the direction is no longer in doubt.

From Promise to Implementation: The Proposal Takes Shape

2026 will serve as a test year for how quickly the new guidelines can be implemented. The proposal focuses on two main objectives:

First, to create a clear and secure pathway for crypto startups and entrepreneurs to have legal certainty instead of fear of retroactive enforcement. Second, to restore global trade within the country—since currently, over 80% of volume occurs outside the US.

These core debates about market structure, token classification, and liquidity provision all circle back to these two goals. If resolved, the entire landscape will change.

The Market Structure Proposal: Token Commodity or Security?

One of the most exciting parts of the proposal is the new approach to token classification. Currently, everything is being squeezed into the security framework, even when it doesn’t really fit.

The proposal is this: if a token is not truly a security in the traditional sense— for example, it operates independently and has actual network utility—it should be treated as a commodity when traded on secondary markets. The need for capital and fundraising remains with the SEC, but day-to-day trading falls under commodity regulators.

This is similar to how traditional finance actually works. The SEC handles disclosure and fraud during fundraising. The commodity regulator focuses on market integrity and derivatives.

This logic is clearer and more practical. It avoids demarcation issues in dealing with unproven projects that lack resources to meet full IPO-style requirements. Proper implementation would give issuers legal certainty while allowing non-security tokens to trade on regulated venues. This is critical for building onshore liquidity and attracting institutional participation.

Competition, Not Just Compliance: The Emerging Perspective

The second major shift in the proposal is the focus on global competitiveness. The current reality is alarming: 80% of crypto trading volume still happens offshore.

Policymakers recognize that over-regulation does not eliminate risk—it simply exports activity abroad. Therefore, the proposal aims to make it more attractive to do business here.

This means a broader focus on technology-neutral rules that control outcomes—fair markets, clear disclosure, market integrity—instead of dictating specific technical architectures. If the goal is to recapture volume from offshore, clarity and usability are more important than theoretical purity.

Two Critical Issues in the Proposal

Success depends on two solutions:

Goal 1: Clear Token Classification

Any framework for “network tokens” must rely on objective and observable criteria—how the token actually functions today and its real utility. Not just the historical issuance mechanism, but the current state of the network, governance, and economic rights.

Investors, traders, and advisors need to assess tokens based on architecture, governance, real-world use, and economic incentives. This clarity will help everyone make informed decisions.

Goal 2: Legal Framework for Market Makers

There are no deep markets without professional liquidity providers willing to quote on both sides, hold inventory, and absorb price volatility. The proposal should provide explicit safe harbor for legitimate market-making activities.

Without legal clarity, market makers will migrate overseas to avoid regulatory risk. The result: thinner books, wider spreads, higher volatility—the exact opposite of regulatory goals.

Experts Answer These Questions

Q: Why is the last issue always treated as a security token?

When a token is originally issued as a security, it goes through traditional finance regulatory requirements. But as it grows, moves into secondary markets, and gains network effects, its use and control change. Its economics become closer to commodity trading than securities offerings.

If a “security” remains a “security,” regulation does not match reality. The framework becomes ambiguous, legal status uncertain, and market function impaired. The proposal looks at what the token is now, not how it was initially issued.

Q: Why do market makers avoid the US and operate abroad?

In the US crypto market today, market makers face ambiguous rules and regulatory uncertainty. There’s no clear guidance on what is legal or illegal in market making activities. They risk retroactive enforcement or reclassification that could change the rules.

There is no recognized “crypto market maker” exemption. Even legitimate liquidity provision could be seen by regulators as market manipulation. Due to this risk, rational choice is to operate where there is certainty—usually offshore. The proposal aims to change this.

Q: How will clearer classification help investors and advisors?

Regulatory uncertainty is inherently risky. When regulatory risk increases, investors demand a premium. Concerns about delisting or illiquidity add another layer of worry.

For fiduciary duty-bound advisors, investing in assets with ambiguous classification can be considered reckless. Many advisors avoid crypto due to regulatory uncertainty—not because of the technology, but because of legal risks.

Clearer classification will provide peace of mind, more predictable pricing, and increased institutional participation. The effect will be crypto becoming part of mainstream portfolios, not fringe speculation.

What Will We See in 2026?

This year will be a transition year. Progress will likely come through operational frameworks that are broadly aligned—tweaks to market structure, clarity on token status, and guidance on liquidity provision.

Even incremental steps will be game-changing. The clear signal: the US is slowly but surely moving toward regulated, competitive, and institutionally accessible crypto markets.

The only question is how quickly the proposed project will be live and implemented.