With Trump’s assumption of office, rapid advancements in cryptocurrency legislation were highly anticipated. However, only the GENIUS Act, addressing stablecoins, has been successfully enacted thus far. The CLARITY proposal, aimed at bringing clarity to the markets, remains at the center of heated debates and discussions. Concerns have been raised about the extension of deadlines to avoid potential delays rendering the legislation ineffective by 2026, and this outcome appears increasingly likely.
2026 Cryptocurrency Legislation
President Trump has signed several executive orders related to cryptocurrencies, and the individuals heading the agencies he appointed have made crypto-friendly moves. However, none of these measures carry the weight and permanence of formal legislation. Changes in leadership, like the replacement of a crypto-friendly SEC chair with someone less supportive, or a change in presidency, could result in a shift back to stricter policies. Presidential orders can be easily repealed, but enacted laws persist regardless of leadership shifts.
Hence, for long-term optimism in the crypto sector, progress in crypto-friendly laws is essential. The year 2026 is a midterm election year, signaling an early start to election-related recesses and a shrinking window for legislative action.
Efforts in the Senate Banking Committee and Senate Agriculture Committee to advance the market structure proposal have not yet reached a desirable stage despite prolonged negotiations. Expected white papers hint at further delays, particularly due to the midterm elections, suggesting that passage within this year is unlikely.
Brian Gardner from wealth management and investment banking firm Stifel commented on the legislative progress:
“We are in a midterm election year. Legislative sessions will conclude earlier than usual.”
“The proposal faces numerous unresolved issues and lacks bipartisan support in the Senate. The chance of it passing this year is questionable.”
Banks vs. Crypto Industry
In the U.S., lobbying remains legal, and crypto lobbyists are pitted against banking counterparts. One reason the law’s passage lacks bipartisan progress is the intense lobbying, with the GENIUS Act, approved by Congress in July, prohibiting interest for stablecoin issuers who hold dollar-backed digital tokens for clients.
Since its enactment, the banking sector has highlighted a loophole in the GENIUS Act that allows third parties (possibly exchanges?) to offer rewards to stablecoin holders, prompting lawmakers to address this in the market structure proposal. When the Senate Banking draft was released, the crypto community opposed it due to banks achieving objectives.
Coinbase‘s advocacy for necessary stablecoin rewards led Scott to indefinitely delay legislative markup. According to Bloomberg, the Senate Banking Committee plans to refocus on housing legislation and revisit the market structure proposal by February or March, assuming no other priorities emerge.
Democrats demand a political ethics law concerning cryptocurrencies, a stance they held during the GENIUS discussions as well, remaining resolute in their insistence. As the process is postponed to March, consensus is still elusive. Achieving a bipartisan draft, securing votes in legislative chambers, and securing Trump’s approval could take one to two months.
Congress is scheduled for a traditional summer recess from August 10 to September 7, 2026. Upon return, Congress will reconvene briefly for approximately 3-4 weeks before another recess for midterm elections, implying that legislative work will largely pause between August 10 and November 6. This highlights the urgency of legislative timing.
