Midterms, Shutdown Risks, and Negotiations: Can Congress Pass a Sweeping Crypto Bill in 2026?
As 2026 approaches, the U.S. crypto industry finds itself at a crucial crossroads. The pressing question is whether Congress can successfully pass comprehensive legislation to regulate digital assets amid political uncertainties, upcoming midterm elections, and ongoing negotiations on Capitol Hill.
A Pivotal Year for Crypto Legislation
The new year is shaping up to be decisive for cryptocurrency regulation in the United States. Lawmakers are pushing to enact an all-encompassing bill that would establish a clear regulatory framework for digital assets—addressing issues ranging from securities and commodities classification to banking regulations.
According to sources familiar with the legislative process who spoke with The Block, there is a 50% to 60% chance that a sweeping crypto bill could become law in 2026. The optimism centers on ongoing bipartisan talks between Democrats and Republicans aimed at bridging key differences.
Kevin Wysocki, head of policy at Anchorage Digital, highlighted the importance of these discussions, noting, “Members of Congress are talking quite a bit between Republicans and Democrats, so that’s a very positive sign.” However, he cautioned that the complex nature of legislation—which straddles banking laws, securities, and commodity regulation—means challenges remain.
Senate Efforts to Define Regulatory Jurisdiction
In the Senate, two main committees are working on separate but related pieces of legislation. The Senate Banking Committee is drafting a bill that would clarify the jurisdictional boundaries between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). One key proposal is the introduction of the term “ancillary assets” to help define which cryptocurrencies do not qualify as securities, an important point for many digital asset projects.
At the same time, the Senate Agriculture Committee—which oversees the CFTC—released legislation last month intending to enhance the agency’s authority over crypto markets. Ultimately, both bills will need to be reconciled into a single version before advancing to a full Senate vote.
Although there was initial hope that the Senate Banking Committee would hold a hearing and vote on their bill before the end of 2025, those prospects have dimmed. A spokesperson for the committee indicated that progress has been made with Democrats and that a markup is now anticipated early in 2026:
“Chairman Scott and the Senate Banking Committee have made strong progress with Democratic counterparts on bipartisan digital asset market structure legislation. The Committee is continuing to negotiate and looks forward to a markup in early 2026.”
Key Points of Contention
Several critical issues continue to complicate negotiations. One major flashpoint revolves around yield-bearing stablecoins. Banking trade associations argue that the recently enacted stablecoin legislation, known as GENIUS, failed to close certain loopholes—particularly provisions that do not ban issuers from offering interest on stablecoins. Banks warn this could distort market incentives by encouraging stablecoins to function like savings or credit instruments, disrupting traditional banking.
Crypto advocates, on the other hand, view yield-bearing stablecoins as fair competition within the market. Another contentious area involves the regulation of decentralized finance (DeFi) protocols, especially concerning anti-money laundering requirements and which regulatory body—the SEC or CFTC—should have oversight.
Cody Carbone, CEO of the Digital Chamber, expressed concern that giving the SEC primary authority to classify tokens could echo the tough regulatory stance seen under former SEC Chair Gary Gensler, potentially leading to an outsized regulatory burden on the crypto industry.
Additionally, potential conflicts of interest related to former President Donald Trump’s extensive crypto ventures have been raised as a complicating factor. Bloomberg reported in July 2025 that Trump and his family have profited around $620 million from various crypto projects, including DeFi and memecoins launched around the time he took office. Senator Cynthia Lummis (R-Wy.) revealed that efforts to include ethical oversight language addressing these conflicts in the legislation faced pushback after submission to the White House.
Challenges at the CFTC
The Commodity Futures Trading Commission itself has been in limbo due to the departure of four commissioners—both Democrats and Republicans—over the past year. Caroline Pham, now acting chair, has announced plans to step down once a permanent chair is confirmed, leaving the agency with minimal representation amid its inclusion in crypto regulatory authority expansion.
“It’s a tough sell to give so much power to an agency with just one commissioner currently confirmed,” Carbone noted, highlighting the agency vacancy as a key negotiating lever for Democrats.
The Race Against Time
What happens in the Senate will be pivotal. After the Senate Banking Committee votes and combines its bill with the Agriculture Committee’s version, the unified legislation must clear the full Senate. Subsequently, the Senate’s bill needs to merge with the House-passed “Clarity” bill from summer 2025. Carbone emphasized the tight timeline involved, stating that progress in committee markups and floor votes must begin early in 2026 to keep momentum going. Delays beyond January would be cause for concern.
Lawmakers face pressure from midterm election campaigns, scheduled to intensify midyear, which could stall legislative efforts. Anchorage Digital’s Wysocki estimates the first half of the year as the primary window to enact crypto regulation before many senators shift their focus to reelection campaigns. A smaller opportunity may arise during the holiday season at year-end.
Additionally, there is looming risk of a government shutdown. Congress has extended federal funding only through January 30, 2026; failure to pass new appropriations could pause legislative activity, including work on the crypto bill.
Political and Industry Perspectives
Some Senate Democrats remain passionate about passing crypto market structure legislation promptly, according to Saga CEO Rebecca Liao, who was also part of President Biden’s 2020 campaign. However, Liao acknowledged the compressed timeline and competing priorities pose significant hurdles.
She also noted the growing political sensitivity around Trump’s crypto ties, pointing out it aligns with broader Democratic messaging on accountability and economic fairness.
Looking beyond 2026, Liao stressed the necessity of regulatory clarity for the future adoption of digital assets, saying:
“In order for crypto to actually get to adoption and mass utilization, you really do need regulatory clarity, and so I think people will push for it again.”
Conclusion
While uncertainties surround the legislative process, 2026 is shaping up as a defining year for U.S. cryptocurrency regulation. The success or failure of comprehensive crypto legislation will hinge on bipartisan negotiations, timely committee action, and the ability of Congress to overcome political distractions like midterm campaigning and government funding negotiations.
As lawmakers grapple with complex issues including stablecoin regulation, DeFi oversight, agency jurisdiction, and ethical concerns, the industry—and broader financial markets—watch closely for clarity and direction in the evolving world of digital assets.
This article is based on detailed reporting by Sarah Wynn for The Block and incorporates insights from multiple industry policy experts and congressional sources.