Efforts to establish clear rules for the U.S. crypto market will likely take longer than many in the industry anticipate. An analysis by TD Cowen indicates that while adoption is still possible in the near term, political dynamics in Washington increase the likelihood of delays. Approval may not come until 2027, with full implementation extending into 2029.
In brief
- TD Cowen warns that political dynamics in Congress could push back the passage of a bill on the structure of the US crypto market until 2027.
- Election cycles and voting rules in the Senate give Democrats several levers to slow down legislation and weigh on regulatory timelines.
- Conflict of interest provisions for senior officials, including Donald Trump, remain a major obstacle in Senate negotiations.
- Even if adopted, effective implementation may not begin until 2029.
Congress Considers Delay of Crypto Market Structure Bill As Election Approaches
TD Cowen's research group in Washington, led by Managing Director Jaret Seiberg, said in a memo Monday that Congress has strong political incentives to slow progress. While a viable path exists to advance a crypto market structure bill this year, lawmakers may choose to wait, especially with key elections coming up. Democrats, in particular, might favor a delay if they believe control of the House could shift after the 2026 midterm elections.
The negotiations, however, have not stopped. Congressional staff from both parties have spent months working on technical language, leaving open the possibility of a quicker deal if political pressure increases. Uncertainty around election results could also push Democrats to compromise sooner rather than later.
The election results are still uncertain, which is why Democrats could strike a deal. This could happen quickly, as staff have been working on the technical language for months.
Jared Seiberg
Several factors continue to shape the calendar debate:
- Control of Congress after the 2026 midterm elections remains uncertain.
- Senate rules require bipartisan support to advance legislation.
- Divisions within the Republican Party could limit the number of votes.
- Election year politics tends to discourage major legislative action.
- Implementation timetables can be adjusted to meet policy objectives.
Senate discussions on market structure blocked by conflict of interest rules
Disagreements over conflict of interest provisions remain a central obstacle. Democrats are expected to push for rules banning high-ranking government officials and their families from owning or operating crypto businesses. This group includes President Donald Trump. Seiberg said such provisions would likely face resistance from Trump unless they are delayed for several years after the law takes effect.
Bloomberg estimated last July that Trump earned about $620 million from crypto adventures associated with his family. This includes World Liberty Financial, a DeFi and stablecoin project that lists Trump and his three sons as co-founders. Family holdings also include interests in BTC mining company American Bitcoin. Lawmakers also expressed concerns about the TRUMP and MELANIA memecoins launched shortly before Trump took office.
A potential compromise would delay implementation of the conflict of interest rules for three years after the law's passage. This approach would push enforcement beyond the next presidential inauguration, effectively exempting Trump. According to Seiberg, Democrats are unlikely to agree to such a deal unless the rest of the legislation is delayed for several years as well, limiting its immediate impact.
The crypto market structure legislation is widely seen as the next major step in regulation following the passage of the GENIUS Act on stablecoins. A final bill would define how digital assets are regulated in the United States, clarify the responsibilities of regulatory agencies, and establish standards for asset classification. The House passed a version of the bill last year, but momentum has slowed in the Senate, where committees are expected to consider the issue later this year.
Senate delays extend uncertainty for crypto companies awaiting US market rules
Passing the bill in the Senate presents another challenge, as it requires 60 votes to overcome a filibuster. Even with unanimous Republican support, at least seven Democratic votes would be needed. Practically speaking, Seiberg said support from eight or nine Democrats might be required, as some Republicans are expected to vote against the measure.
This voting arithmetic gives Democrats greater ability to delay progress. A delayed vote could push implementation beyond the next presidential term, allowing regulators appointed by a future administration to set final rules. Similar delays have occurred before, including with the GENIUS Act, which includes a three-year implementation period.
The main consequences of a delayed schedule include:
- Rules coming into effect under a different administration.
- Greater influence of regulatory agencies on final standards.
- Prolonged uncertainty for the crypto industry.
- Less urgency to reach a compromise before the elections.
- An increased focus on political positioning rather than legislative speed.
Crypto companies generally want the legislation to be put in place as soon as possible, ideally under a Trump administration, and many appear unconcerned about the conflict of interest provisions. This disconnect between industry priorities and political incentives continues to generate tension around the bill. Political analysts widely expect a crypto market structure bill to pass in 2026, although enforcement could still be delayed for several years.
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