2026: A pivotal year for cryptocurrency regulation in the US - The power game is underway

2026 will be a decisive milestone for the future regulation of cryptocurrencies in the United States. According to industry experts’ forecasts, there is a 50-60% chance that comprehensive legislation regulating digital assets will be passed before the midterm elections. However, the path to that is not smooth — negotiations between the Republican and Democratic parties are still stuck on deep structural issues related to the oversight authority of banking, securities, and commodities agencies.

The Difficulties in Regulatory Design

The core of the debate is the lack of consensus on how to approach stablecoins — profit-yielding tokens. Banks are pushing for increased oversight, arguing that the GENIUS law enacted last summer is not strong enough to prevent issuers from offering interest rates. Conversely, the cryptocurrency community argues that this capability is a normal market competition phenomenon.

Another contentious issue is DeFi (decentralized finance) — compliance management for anti-money laundering, and more importantly, whether certain coins fall under the jurisdiction of the SEC or CFTC. Cody Carbone, head of the Digital Chamber, warns of the dangers of SEC gaining too much power — which could revert the industry to a restrictive era under Chairman Gary Gensler.

Adding to the complexity is the political situation. Conflicts of interest among key figures in the executive branch involved in cryptocurrency are creating a difficult atmosphere. Reports indicate that a family close to power has made approximately $620 million through financial projects, owns shares in a US Bitcoin mining company, and related meme coins. This not only creates conflicts but also fuels accusations of favoritism in legislation.

Procedural Challenges and Election Schedule Pressures

The Senate Banking Committee is expected to initiate markup procedures early next year, with positive signals regarding bipartisan negotiations. However, for a bill to succeed, it must overcome several hurdles: merging versions from the Banking and Agriculture Committees, a full Senate vote, and then aligning with the Clarity Act passed by the House.

Kevin Wysocki from Anchorage Digital emphasizes that the window of opportunity is narrow — lawmakers only have the first two quarters of the year to act, or they will be pulled into election issues. Carbone expresses concern that if no markup mechanisms are seen in both committees by January, but at least a reconciliation bill is passed in the Senate within the next six weeks, expectations should be lowered.

Furthermore, personnel changes at the CFTC have become an advantage for the Democratic Party. After four commissioners resigned last year, only one Republican commissioner remains. Carbone argues that no senator wants an agency designed to have five commissioners to wield such broad authority.

Rebecca Liao, director of Saga, points out that the opposition’s messaging campaign focuses on injustice — the monopolistic benefits of officials will be a continuous attack point. After last year’s 43-day government shutdown, Congress just allocated a temporary budget until January 30, 2026 — another milestone where legislative crises could recur.

However, Liao also emphasizes that failure in 2026 is not an option. As mainstream financial institutions enter the cryptocurrency space, regulatory transparency becomes an essential requirement for cryptocurrencies to achieve genuine acceptance and widespread integration into the financial system.