Why the Crypto Bill Might Face Delays Before the 2026 U.S. Midterm Elections

The journey towards passing the Crypto Market Structure Bill may encounter obstacles as the U.S. approaches the 2026 midterm elections.

Key Takeaways

The Crypto Market Structure Bill may be delayed due to political strategies ahead of the 2026 midterm elections.
There are concerns from industry leaders regarding the potential impact of these delays on the crypto sector.
Major contentious topics include DeFi oversight, stablecoin interest, and the ethics regarding certain political figures' crypto interests.
The banking lobby plans significant expenditures to promote pro-bank candidates, indicating an impending conflict between the banking sector and the crypto industry.
Two versions of the bill, the CLARITY Act and the RFIA, are currently in progress, with the latter awaiting markup before going to vote.

Why U.S crypto bill risks stalling ahead of 2026 U.S. midterm elections

With the postponement of the bill’s markup to January, concerns arise regarding potential delays in the legislative process. Influential figures in the crypto space, including Scott Johnsson from Van Buren Capital, speculate that the Democratic Party may extend negotiations to avoid conflicts with banks and party leaders. Key issues like DeFi regulation and stablecoin rewards are central to the debates, and the banking sector's lobbying efforts could further complicate the situation.

Potential Hurdles for the Crypto Bill

Scott Johnsson, a General Partner at Van Buren Capital, expressed concerns about the pacing of the legislative process. He noted that, “Dems have every incentive to draw this process out until the last moment (maybe late Q1) and then drop the veil.” This suggests that Senate Democrats may intentionally prolong discussions to provide the appearance of goodwill toward crypto lobbyists while avoiding backlash from banking institutions and party leaders.

Johnsson further explained that if delays continue past the midterms, the industry's primary policy goal could be jeopardized, indicating that the Democrats might change their stance if pressured.

Key Issues in the Crypto Bill

On December 17, several leaders from the crypto community, including executives from Coinbase, participated in a bipartisan meeting with the Senate Banking Committee, chaired by Republican Senator Tim Scott. The goal of this meeting was to assess the bill’s progress following its postponed December markup. According to journalist Eleanor Terrett, attendees maintained a “cautiously optimistic” outlook regarding the advancement of the bill.

Currently, the main contentious topics related to the bill include governance over decentralized finance (DeFi), stablecoin rewards, and ethical considerations tied to the crypto interests of President Donald Trump’s family. Traditional financial entities, like Citadel Securities, are advocating for regulation of DeFi in anticipation of a tokenization surge, while the crypto industry seeks exemption for these platforms. Meanwhile, banks have been pushing to close loopholes regarding stablecoin interest, raising significant opposition since August.

crypto bill

Will the Crypto Bill Overcome Election Challenges?

The banking lobby is gearing up to invest over $100 million to support pro-bank candidates, aiming to counteract the growing influence of crypto donations. This anticipated spending suggests an imminent confrontation between traditional finance and the crypto space as the 2026 midterms approach, according to James Seyffart, a Bloomberg ETF analyst. He remarked, “The 2026 meta — Citadel and the Banks fight back against crypto.”

There are currently two proposals for the market structure bill: the CLARITY Act and the RFIA (Responsible Financial Innovation Act), with RFIA awaiting markup before it can move to a Senate vote. Once it passes, it will need to be reconciled with the House version before proceeding to the President for signing. Despite worries about the midterm elections potentially derailing progress, there remains a 77% chance the legislation could be enacted before 2027.

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Final Thoughts

The future of the Crypto Market Structure Bill hinges on a myriad of factors, including the bipartisan support it gains and the strategic interests of both the banking industry and the crypto community. As we edge closer to the midterm elections, the outcome remains uncertain, but it is clear that both sectors are preparing for significant political engagement.