Potential Delay of US Crypto Market Structure Legislation to 2027: Insights and Implications

US Crypto Market Structure Bill Faces Potential Delay

According to TD Cowen, the upcoming 2026 midterm elections in the US could hinder the advancement of a digital asset market structure bill in the Senate. The bill, known as the CLARITY Act in the House of Representatives and the Responsible Financial Innovation Act in the Senate, may not pass until 2027, with implementation potentially in 2029.

Political Dynamics at Play

TD Cowen's Washington Research Group indicates that Senate Democrats might withhold support for the bill due to potential shifts in Congressional power. The current Republican majority could change post-midterms, impacting the bill's progress.

"Election outcomes are always uncertain, which is why Democrats may cut a deal," the report stated.

In a bipartisan draft from the Senate Agriculture Committee, "conflict of interest safeguards" were proposed, affecting individuals like former President Donald Trump and his family regarding cryptocurrency holdings.

Concerns Over Conflicts of Interest

Democrats have raised issues about Trump's connections to the crypto industry, including ties to World Liberty Financial and the pardoning of former Binance CEO Changpeng Zhao. TD Cowen notes that time might favor the bill's passage in 2027, with crypto entities needing to accept potential impacts from presidential elections.

Legislative Process and Future Implications

The Responsible Financial Innovation Act is awaiting markups in the Senate Banking and Agriculture Committees. Reports suggest a potential markup by the Banking Committee in January. If enacted, the bill could transfer regulatory power over digital assets from the SEC to the CFTC, a significant shift in oversight dynamics.