2026 Cryptocurrency Bill Stalls! Trump Midterm Elections and Government Shutdown Risks Loom

The U.S. Congress is currently reviewing comprehensive legislation to regulate the crypto industry, but passing it before the 2026 midterm elections remains uncertain. Crypto advocates estimate the likelihood of the bill becoming law is only 50-60%. The Senate Banking Committee plans to review the bill in early 2026, but it must be coordinated with the version from the Agriculture Committee. The risk of a government shutdown and the timing pressure of Trump’s midterm elections leave lawmakers with only the first half of 2026 as the window.

Three Major Legislative Obstacles Behind the 50% Passage Rate

Kevin Wysocki, Policy Director at Anchorage Digital, believes there is a 50% chance the bill will pass into law in 2026. He states, “What I find truly encouraging is that members of Congress have engaged in a lot of dialogue between Republicans and Democrats, which is a very positive sign. Some issues are still very tricky, and the legislation itself covers banking law, securities law, and commodities law — so the situation is quite complex.”

The Senate is reviewing a comprehensive bill aimed at fully regulating the crypto industry. The draft from the Senate Banking Committee proposes to allocate jurisdiction between the two main federal agencies, the SEC and CFTC, and introduces the new term “auxiliary assets” to clarify which cryptocurrencies are not securities. Meanwhile, the Senate Agriculture Committee, responsible for overseeing the CFTC, released a legislative draft last month that would grant new powers to the CFTC. These two versions of the bill need to be coordinated.

Earlier optimism suggested that the Senate Banking Committee would hold hearings before the end of the year to amend and vote on the bill, but that optimism has faded. However, a spokesperson for the Senate Banking Committee said they are now planning to review the bill at the beginning of the new year and noted that communication with Democrats has made progress. The spokesperson stated, “Chairman Scott and the Senate Banking Committee have made significant progress with Democratic colleagues on bipartisan support for digital asset market structure legislation. The committee continues to negotiate and expects to hold a hearing in early 2026.”

Disagreements between banks and crypto companies over the regulation of stablecoins remain a key point of contention. The banking industry association pointed out that the stablecoin legislation that took effect this summer, GENIUS, has critical loopholes that fail to fully prohibit issuers from paying interest on stablecoins. They warn that this loophole could turn stablecoins into savings and credit tools rather than simple payment instruments, creating “distorted market incentives” for traditional banks. In contrast, crypto supporters argue that the ability of stablecoins to generate yields simply reflects fair and healthy competition.

The Digital Chamber of Commerce CEO, Cabone, stated that another issue is how to regulate decentralized finance (DeFi), especially from an anti-money laundering perspective, and whether certain tokens should fall under SEC or CFTC jurisdiction. Given the SEC’s more critical stance on crypto under former Chair Gary Gensler, there are concerns that the SEC might become the ultimate decision-maker. Cabone said, “If legislation stipulates that the SEC will be the first to decide whether tokens are securities or commodities, that’s very concerning — it looks a lot like heading down Gensler’s path.”

Three Major Controversies in the 2026 Crypto Legislation

1. The Stablecoin Yield Dispute

· Banks demand banning stablecoin interest payments to avoid competing with deposits

· Crypto companies argue that yield-bearing stablecoins represent fair competition

· The GENIUS bill’s loopholes give banks and crypto firms leverage in negotiations

2. SEC vs. CFTC Jurisdiction Dispute

· Who has the authority to decide whether tokens are securities or commodities?

· Crypto industry fears the SEC will repeat Gensler’s “single police on the street” approach

· Anti-money laundering standards for DeFi protocols remain unclear

3. CFTC Commissioner Vacancy Crisis

· Four commissioners have resigned or announced resignation, leaving only an acting chair

· Democrats are using commissioner appointments as bargaining chips

· Growing institutional power but staffing shortages raise concerns

Trump’s Conflict of Interest Becomes a Key Obstacle for Democrats

Another contentious point in the 2026 crypto legislation is Trump’s conflicts of interest in the crypto space. Bloomberg estimated in July that the current president has profited approximately $620 million from his family’s crypto projects, including World Liberty Financial’s DeFi and stablecoin projects, which list Trump and his three sons as co-founders. Additionally, the Trump family holds a 20% stake in the mining company American Bitcoin. Lawmakers have also repeatedly expressed concern over Trump’s launch of the freely floating “TRUMP” and “MELANIA” themed tokens a week before his inauguration.

Wyoming Republican Senator Cynthia Lummis, involved in negotiations on the Senate bill, said at the Blockchain Association Policy Summit in Washington, D.C., that the White House had participated in drafting language related to ethics. Lummis stated she and Democratic Senator Ruben Gallego had submitted relevant language to the White House, but it was rejected. This indicates that the Trump administration opposes legislative provisions that restrict the president’s family’s crypto activities.

Saga CEO Liao Libei said that as the midterm elections approach, Trump’s conflicts of interest in crypto could attract increasing attention. “We see the Democrats forming a real information camp around affordability, so anything that involves privileges or unjust enrichment by the president or his officials will be repeatedly attacked in Democratic propaganda.” This suggests that the 2026 crypto bill could become a political weapon in the midterm elections, with Democrats using Trump’s conflicts of interest to attack the Republicans.

Midterm Election Countdown and Dual Pressures of Government Shutdown

Time is the biggest enemy facing the 2026 crypto legislation. Kevin Wysocki from Anchorage said lawmakers have about half a year left in the first half of next year to pass the bill before the election season begins. He stated, “In terms of timing, I think we expect to wait until the first two quarters of next month, when lawmakers will really focus on election matters. Then, perhaps around the holiday season at the end of 2026, there will be a small window to push this legislation after the elections.”

Digital Chamber of Commerce CEO Cabone expressed concern if the Senate’s bill does not advance in January. “They just need to show progress from the start. If we don’t see that by January, I’ll be very pessimistic.” Cabone believes the Senate bill must first pass committee votes, then be merged with the Agriculture Committee version, submitted for full Senate vote, and finally coordinated with the House-passed Clarity version. “There are many steps remaining.”

The risk of a government shutdown is another major threat. After Congress ended a 43-day shutdown in November, it temporarily funded the government. This funding will last until January 30, 2026, but if no appropriations agreement is reached again, the government will shut down again, and the development of the crypto legislation will be halted accordingly.