According to a report by TD Cowen, comprehensive U.S. crypto market structure legislation is unlikely to pass this year, despite ongoing efforts in Congress.
Instead, analysts now expect meaningful legislative progress to slip into 2027, with full implementation of final regulatory rules potentially delayed until 2029.
Ethics Rules Emerge as the Key Roadblock
TD Cowen identifies a conflict-of-interest dispute as the primary obstacle preventing near-term passage. Democratic lawmakers are pushing for strict ethics provisions that would bar senior government officials from owning, operating, or benefiting from cryptocurrency businesses. These provisions explicitly reference concerns involving President Trump and members of his family.
This disagreement has created a legislative impasse, as Republicans oppose ethics language that would immediately apply to the current administration, while Democrats insist such safeguards are necessary for the bill’s credibility.
A Potential Compromise: Delayed Enforcement
To resolve the standoff, TD Cowen outlines a possible compromise: delaying the enforcement of conflict-of-interest provisions by approximately three years. Under this framework, the broader crypto market structure bill could move forward without the ethics restrictions applying during the current Trump administration.
Such a delay would allow lawmakers to establish a regulatory framework while postponing the most politically sensitive elements until a later administration.
Political Incentives Favor Delay in 2026
The report also highlights political calculations shaping the timeline. Analysts note that Democrats may have little incentive to accelerate passage in 2026 if they believe there is a realistic chance of regaining control of the House of Representatives in the upcoming midterm elections. A shift in congressional power could allow them to revisit ethics provisions under more favorable conditions.
CLARITY Act Remains the Near-Term Focus
Despite expectations for broader delays, TD Cowen emphasizes that lawmakers are not stepping away from crypto regulation entirely. Work is expected to continue in early 2026 on the CLARITY Act, which remains a central component of the broader market structure effort and a focal point for ongoing negotiations.
For now, however, TD Cowen’s analysis suggests that while regulatory momentum is building, the most consequential changes to U.S. crypto market structure are still several years away.
