Changes in the US Crypto Market Structure Bill: Political Battles May Delay Legislation Until 2027

Washington-based political analysis firm TD Cowen recently released a report casting a shadow over the prospects of the highly anticipated U.S. “Crypto Market Structure Act.” The report points out that due to fundamental disagreements between Democrats and Republicans over conflict-of-interest provisions involving the Trump family, coupled with political uncertainties brought by the 2026 midterm elections, the bill is very unlikely to pass within 2026. Its final approval could be delayed until 2027, with full implementation pushed back to 2029.

This potential delay means that the long-awaited clear regulatory framework for asset classification and oversight responsibilities in the U.S. crypto industry will have to continue waiting in political limbo. This introduces new uncertainties to the market and could also reshape the global competitive landscape of crypto regulation.

“Trump Clause” Becomes Core Obstacle, Partisan Gridlock Deepens

In the report published on January 5, TD Cowen’s Washington research team sharply identified the biggest “stumbling block” in the legislative process: the Democrats’ insistence on including strict conflict-of-interest restrictions for high-ranking officials, including the President, and their immediate family members. This clause aims to prohibit senior government officials and their immediate relatives from owning or operating crypto-related assets. It is widely viewed as targeting former President Donald Trump and his family. Bloomberg previously estimated that Trump’s family has profited approximately $620 million through related crypto ventures such as DeFi and stablecoin projects like World Liberty Financial, and they also hold shares in Bitcoin mining company American Bitcoin. Recently, memecoins like TRUMP and MELANIA have also attracted legislative concern over potential conflicts of interest.

For Democrats, this clause is a key safeguard to ensure fair financial regulation and prevent “abuse of power.” They are firmly committed. However, for Trump and his Republican supporters, it is seen as an “unacceptable” targeted restriction. Jared Seburg, Managing Director at TD Cowen, believes that unless the clause’s effective date is postponed until several years after the bill’s passage, Trump will never accept it. The report suggests a possible compromise: setting the conflict-of-interest clause to take effect three years after the bill’s enactment. This way, the clause would not apply to Trump’s potential next term (if he wins the 2028 election), which might make it acceptable to Republicans. However, Seburg also notes that Democrats are likely to demand, “Since the conflict clause is delayed three years, the entire bill’s implementation should also be postponed three years,” pushing the full rollout to 2029. This “time-for-space” political bargaining is becoming a key variable in the bill’s prospects.

Core Dispute of the Crypto Market Structure Bill

Main controversy: whether to include conflict-of-interest restrictions on high officials (including the President) and their families regarding crypto assets.

Democratic stance: Must include to ensure fair regulation and prevent market influence through official power.

Republican/Trump stance: Seen as targeted restrictions; unacceptable unless the effective date is significantly delayed.

Potential compromise: Postpone the conflict clause and the entire bill’s implementation to 2027 legislation and 2029 enforcement, making it inapplicable to Trump’s current potential term.

Legislative hurdle: Requires 60 votes in the Senate to overcome filibuster, with an estimated support of at least 8-9 Democratic senators.

Midterm Election Dynamics, 2027 as a More Realistic Goal

Beyond specific clause disputes, the broader political cycle is another decisive factor driving the bill’s delay. TD Cowen’s report clearly states that Democrats currently lack the political incentive to push the bill quickly. With the 2026 midterm elections approaching, Democrats have a chance to regain control of the House. If successful, they will have greater legislative dominance in the new Congress starting in 2027, allowing them to shape bill details more aligned with their ideology and ensure that regulatory agencies like the SEC set the final rules.

This “waiting for a more favorable moment” strategy sharply contrasts with the crypto industry’s urgent need. The industry generally hopes the bill can be enacted during Trump’s administration and is less concerned about the conflict-of-interest clause itself. However, the political reality is that in the Senate, any bill needs 60 votes to overcome filibuster. Even if all Republican senators support it, at least 7-9 Democrats would need to defect. Given the current political climate and election considerations, securing enough Democratic support for passage within this year is highly challenging.

Therefore, the report positions 2027 as a more likely timeline. By then, the new election cycle will have concluded, and the political landscape in Congress will be clearer. Regardless of which party is in control, the new Congress will have more political space to handle this complex and historically significant legislation. Seburg wrote in the report: “Time favors the enactment of the bill, because if it passes in 2027 and takes effect in 2029, many issues will no longer be relevant.” This suggests that as time progresses and crypto assets become more deeply integrated into the economy, the consensus on establishing a regulatory framework may transcend party lines.

Looking Ahead from the GENIUS Act: The Long Road of Complex Legislation Implementation

Even if the bill passes in 2027, the market should prepare for a lengthy process of rulemaking and implementation. TD Cowen’s report references the recently passed GENIUS Act (the Stablecoin Act) as a benchmark. This milestone legislation established a federal regulatory framework for stablecoins but set a three-year phased implementation schedule. This indicates that for the more complex “Market Structure Bill,” involving multiple regulators (like SEC and CFTC), asset classification details, and exchange compliance standards, finalizing regulations and industry adaptation will take a long time.

The projected implementation year of 2029 considers not only legislative complexity but also the outcome of the 2028 presidential election. If the bill is passed by a Republican-led Congress in 2027 but its main implementation phase occurs in 2029 or later, a change in administration could see Democratic agencies like the SEC holding the key to detailed rulemaking. This could lead to regulatory frameworks that differ from the original legislative intent. Such uncertainty is an inherent feature of the intersection of politics and financial regulation.

From a global perspective, U.S. hesitation may create opportunities for other financial centers. While the U.S. remains gridlocked, other major markets are accelerating crypto institutionalization. For example, Nasdaq has submitted proposals to the SEC seeking approval to list tokenized securities on its main markets, seen as a key step toward integrating blockchain tech into core U.S. finance. Japan is more aggressive; the Financial Services Agency (FSA) plans to reclassify 105 cryptocurrencies, including Bitcoin and Ethereum, as “financial products,” subject to a 20% capital gains tax similar to stocks, and actively explores digital assets via securities exchanges. The Tokyo Stock Exchange has even allowed digital asset trading platforms to apply for listing. These developments exert competitive pressure on the U.S., though short-term political factors still dominate.

Market Impact and Industry Outlook: Finding Certainty in Uncertainty

For the crypto market, legislative delays are a double-edged sword. In the short term, the further postponement of regulatory clarity will increase market uncertainty and may hinder large-scale deployment by institutions before rules are clear. U.S. crypto firms eager to confirm compliance pathways through legislation should prepare for continued “test-and-learn” approaches.

However, from another perspective, delays are not necessarily negative. The intense partisan debate itself underscores that crypto assets and their regulation have become a significant part of the U.S. political and economic agenda. While the legislative process is slow, the direction is clear: to establish a comprehensive federal regulatory framework and end the current regulatory chaos. This sense of certainty can support long-term investors. Industry analysts previously estimated a 50-60% chance that the bill could become law by 2026; TD Cowen’s report offers a more conservative, perhaps more realistic, alternative timeline.

For investors and industry players, the current strategy should be “patience and active preparation.” While waiting for federal legislation, closely monitor state-level regulatory developments (e.g., New York) and actions by agencies like the SEC and CFTC under existing laws. Additionally, non-U.S. regulatory progress—such as policies in Japan, Europe, and Singapore—will serve as important signals and potential opportunities globally. Ultimately, a consensus is forming worldwide: crypto assets are moving irreversibly toward institutionalization and compliance, and the road to this future will be long and winding.

What Is the “Conflict-of-Interest Clause”? The Firewall of U.S. Financial Regulation

In U.S. political and financial regulation history, conflict-of-interest provisions targeting government officials are not new. Their core purpose is to establish a “firewall” to prevent public officials from using their position to benefit themselves, family members, or related parties financially—thereby protecting public interests and market fairness.

Such clauses typically require senior officials to disclose detailed financial holdings and may mandate divestment of certain conflicted assets (e.g., stocks in specific industries) or placing them into independent managed trusts during their tenure. Introducing such provisions into the crypto sector signifies that digital assets are now formally categorized as “financial assets that could pose significant conflicts of interest.” Supporters argue that, given the high volatility of crypto markets, ongoing regulatory development, and the deep involvement of the Trump family in the industry, these clauses are vital for maintaining fairness in government financial policies. Opponents contend that they overreach, restrict citizens’ (including the President’s) property rights, and are politically motivated targeting measures.

A Rocky Path: A Historical Look at U.S. Crypto Legislation

The U.S. efforts to establish a comprehensive federal regulatory framework for crypto assets have spanned multiple Congress sessions. Years ago, some lawmakers proposed relevant bills, but none gained legislative focus. A turning point came in 2023-2024, when a series of industry events and court rulings highlighted the risks of regulatory vacuum, prompting both parties to take the issue more seriously.

Legislative momentum accelerated in 2025. With bipartisan cooperation, the House Financial Services Committee advanced and passed versions of the “Stablecoin Act” (later signed into law as the GENIUS Act) and the “Crypto Market Structure Act.” The former focused on stablecoin regulation; the latter aimed to address fundamental issues like the classification of securities versus commodities and regulator responsibilities—currently the core sticking points.

This entire process reflects a typical American approach to innovative regulation: after crises or urgent pressures, through lengthy hearings, debates, lobbying, and bipartisan negotiations, a compromise acceptable to all parties is reached. The current delays are a familiar chapter in this complex political process.