US efforts to establish a comprehensive regulatory framework for cryptocurrency markets risk sliding into the next political cycle, with passage increasingly likely in 2027 and implementation delayed until 2029, according to a research note from investment bank TD Cowen.
US Crypto Market Structure Bill Faces Drift to 2027 as Politics Overtakes Policy
6 January 2026 - 10:54 CET
By Sandmark staff
In a Monday briefing, TD Cowen’s Washington Research Group said congressional politics, rather than technical complexity, are now the main obstacle to swift passage.
While a pathway for a market structure bill to advance this year remains open, analysts warn that Democratic lawmakers may have little incentive to accelerate negotiations ahead of the 2026 midterm elections.
“Election outcomes are always uncertain, which is why Democrats may cut a deal,” TD Cowen managing director Jaret Seiberg wrote. “That could happen quickly, as staff have been working on the technical language for months.”
Still, the note cautioned that timing now leans towards delay rather than compromise in the short term.
Extended legislative timeline
Seiberg said that lawmakers on both sides may ultimately accept a longer legislative horizon.
Under that scenario, a bill passed in 2027 and implemented in 2029 would resolve immediate political conflicts while allowing the next presidential election to shape final regulatory outcomes. Crypto firms, he said, would need to accept that electoral shifts could materially influence the rules governing their industry.
At the centre of the impasse is conflict-of-interest language. Democrats are expected to push for provisions barring senior government officials and their families from owning or operating cryptocurrency businesses, language that could directly affect President Donald Trump.
TD Cowen’s note described such provisions as a “nonstarter” for Trump unless their effective date were postponed well beyond the next inauguration.
One potential compromise outlined in the note would delay the conflict-of-interest provisions by several years, effectively ensuring they would not apply to Trump.
However, TD Cowen said Democrats would be unlikely to accept such an arrangement unless the rest of the bill were also delayed.
Regulatory ambition meets reality
The potential slowdown comes even as momentum builds around narrower crypto legislation, including the GENIUS Act, which focuses on stablecoin issuance and oversight.
TD Cowen’s analysis suggests that targeted bills may continue to move ahead, while broader market structure reforms become entangled in election-year politics.
The result, according to the firm, is a widening gap between regulatory ambition and legislative reality, with clarity for crypto markets increasingly pushed toward the latter half of the decade.
