U.S. Crypto regulation delayed until 2026! Bipartisan negotiations stall, industry disappointed

The U.S. Senate Banking Committee confirmed on Monday that the scheduled cryptocurrency market structure legislative hearing has been officially postponed to early 2026. A spokesperson for Committee Chairman Tim Scott stated in a release that although significant progress has been made bipartisan on digital asset market structure legislation, Chairman Scott insists that this work should be a bipartisan achievement. Therefore, the decision was made to delay the hearing to ensure strong bipartisan consensus.

Bipartisan Negotiations Stall, Scott Insists on Consensus First

(Source: U.S. Senate Banking Committee)

A statement issued by a spokesperson for Senate Banking Committee Chairman Tim Scott on December 15 confirmed that the committee will not hold a cryptocurrency market structure review meeting this year. The statement emphasized that Chairman Scott and Democratic colleagues have made significant progress on bipartisan digital asset market structure legislation, but the chairman has consistently made clear that this work must be a bipartisan effort.

“He has consistently engaged patiently and sincerely in discussions, ultimately facilitating a strong bipartisan cooperation result that provides clear guidance for the digital asset industry and positions the U.S. as the global cryptocurrency capital,” the spokesperson said, adding, “The committee continues negotiations and looks forward to conducting the review in early 2026.”

This insistence on bipartisan consensus reflects Scott’s political strategy but also exposes deep divisions in Congress over crypto regulation legislation. Democrats and Republicans still differ on core issues such as the allocation of regulatory authority, investor protection levels, and how to regulate decentralized finance (DeFi). While both sides agree on the need for a clear regulatory framework, the tug-of-war over specific provisions has repeatedly delayed legislation.

More notably, Scott’s choice to postpone this week rather than push for a hearing indicates he values the likelihood of final passage over short-term political showings. In the highly polarized U.S. Congress, bills lacking bipartisan support often struggle to reach the necessary 60 votes in the Senate.

Industry Disappointment Spreads, Regulatory Vacuum Continues

Cryptocurrency investor and researcher Paul Barron bluntly stated, “The market structure bill failed during the Senate review stage… the plan for early 2026 may also face risks.” This pessimism has quickly spread within the industry, with many practitioners worried that even in 2026, the bill could be further delayed due to political factors such as midterm elections.

The core goal of this legislation is to clarify how the U.S. Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) will regulate the crypto markets, with the CFTC designated as the primary regulator for spot markets. This redistribution of regulatory power would fundamentally change the landscape of crypto regulation in the U.S., but it also sparks fierce controversy over the reallocation of authority.

In recent years, the SEC has dominated crypto regulation through enforcement actions, viewing most tokens as securities. If the new bill grants the CFTC authority over spot markets, it would significantly reduce SEC power, which has met resistance within the regulatory agencies.

Three Major Industry Concerns Over Delay

Extended Regulatory Uncertainty: Until clear regulations are enacted, U.S. crypto companies face ambiguous oversight from SEC and CFTC, increasing compliance costs and legal risks.

Loss of International Competitiveness: The EU’s MiCA regulation has come into effect, and jurisdictions like Singapore and Hong Kong are actively promoting friendly regulation. U.S. legislative delays will cause continued outflow of companies and capital.

Erosion of Market Confidence: The industry initially expected regulatory breakthroughs in 2025 under the Trump administration; the delay until 2026 means waiting at least another half-year.

2026 Political Risks: Shadows of Midterm Elections

In 2026, midterm elections will be held, with all 435 House seats and 33 Senate seats up for election. Historical experience shows that midterms often delay or further complicate the passage of bipartisan-supported bills. During election years, lawmakers tend to adopt more conservative positions and avoid risky votes on contentious issues to protect their re-election prospects.

The spot crypto market declined on Monday following the delay announcement, reflecting investor concerns over prolonged regulatory uncertainty. What worries the industry even more is the unclear timeline for resuming review hearings in 2026. Congress will focus immediately on federal funding after the holidays, with current appropriations set to expire on January 30, so crypto legislation may be postponed until after more urgent budget negotiations.

Even if hearings resume as scheduled in early 2026, it will still take months for the bill to pass. After Senate approval, it must also be approved by the House and signed by the President. The entire legislative process could only be completed in the second half of 2026, assuming everything goes smoothly. Considering potential shifts in congressional seats due to midterm elections, the bill may need to be renegotiated, further delaying the timeline.

A worse scenario is that if the majority party in the Senate or House changes after the 2026 midterms, bipartisan consensus could completely collapse, and the legislative process might have to start from scratch. This political uncertainty makes the “early 2026” promise highly variable, which explains industry pessimism.

Costs and Solutions of the Regulatory Vacuum

The ongoing delay in U.S. crypto regulation legislation has caused tangible damage. Over the past two years, many U.S. crypto firms have chosen to establish headquarters abroad or shift their focus to jurisdictions with clearer regulation. Coinbase, Kraken, and other major exchanges are actively expanding internationally, partly due to regulatory uncertainty in the U.S.

Meanwhile, the EU’s Markets in Crypto-Assets Regulation (MiCA) came into full effect at the end of 2024, providing a clear regulatory framework for European crypto companies. Countries like Singapore, Hong Kong, and the UAE have also introduced crypto-friendly policies to attract global capital and talent. Continued delays in the U.S. could result in losing leadership in setting global crypto regulatory standards.