Midterms, Shutdown Risks, and Negotiations: Can Congress Pass Comprehensive Crypto Legislation in 2026?

The next year will be decisive for cryptocurrency regulation in the United States, with lawmakers racing to enact a sweeping market structure bill before the 2026 midterm elections.

Crypto advocacy sources who spoke with The Block estimate a 50% to 60% chance of such legislation becoming law next year. While bipartisan talks continue, significant hurdles remain.

Bipartisan Progress Stalls in the Senate

Optimism had been building that the Senate Banking Committee might hold a markup and vote before year-end, but that hope faded. A committee spokesperson now says progress with Democrats is ongoing, with a markup expected early in 2026.

The Senate Banking Committee’s draft allocates jurisdiction between the SEC and CFTC while introducing “ancillary assets” to clarify non-security tokens. The Agriculture Committee’s version, released last month, expands CFTC authority. Reconciling these drafts remains a key challenge.

Major Sticking Points in Negotiations

Several contentious issues are slowing progress, according to industry sources.

One major dispute involves yield-bearing stablecoins. Banking trade groups argue the GENIUS Act leaves loopholes that could allow issuers to offer interest, turning stablecoins into savings vehicles and distorting competition.

Crypto advocates counter that yield is simply fair competition in a free market.

Another flashpoint is decentralized finance (DeFi) regulation—specifically AML obligations and jurisdiction over tokens. Industry leaders worry the SEC could retain first-mover authority, echoing the agency’s previous aggressive stance under Gary Gensler.

President Trump’s crypto conflicts of interest have also surfaced as a negotiating tool for Democrats. Bloomberg estimated the president earned $620 million from family ventures like World Liberty Financial and American Bitcoin, alongside memecoins TRUMP and MELANIA.

Sen. Cynthia Lummis (R-Wyo.) confirmed White House involvement in ethics language, though initial proposals were rejected.

CFTC Vacancies Complicate the Path Forward

The CFTC’s reduced staffing has become a Democratic leverage point. Four commissioners—Democrats Kristin Johnson and Christy Goldsmith Romero, and Republicans Caroline Pham and Summer Mersinger—have departed or announced plans to leave.

Acting Chair Pham has signaled her exit once Mike Selig is confirmed, leaving the agency with just one Republican commissioner.

“I don’t think any senator wants to hand so much power to an agency that’s supposed to have five members but currently has one,” said Digital Chamber CEO Cody Carbone.

Midterm Elections and Shutdown Risks Loom Large

What happens next in the Senate will be pivotal. Once the Banking Committee advances its version, it must be reconciled with the Agriculture Committee’s draft and passed by the full Senate.

The reconciled Senate bill would then need alignment with the House’s Clarity Act, which passed the House over the summer.

If markups don’t occur in January, sources say momentum could stall quickly. “They need to show progress right out of the gate,” Carbone said.

Midterm elections in November 2026 add urgency. Lawmakers have roughly the first half of the year before campaign mode dominates.

A potential government shutdown remains a risk. Current funding expires January 30, 2026; failure to agree could halt progress on crypto legislation.

As elections near, Trump’s crypto ties could become a Democratic talking point on affordability and privilege, sources warned.

Outlook: Regulatory Clarity Remains Critical

If Congress fails to pass a market structure bill in 2026, advocates expect renewed efforts. “For crypto to reach mass adoption, you really need regulatory clarity,” said Saga CEO Rebecca Liao.

Institutional players are already deeply involved in digital assets. The industry will continue pushing for a framework that balances innovation with oversight.

2026 will test whether Congress can deliver comprehensive crypto legislation—or whether midterms, shutdown risks, and partisan divides will delay meaningful reform once again.