A TD Cowen note dated January 5, 2026 argued that the U.S. crypto market-structure bill may not pass until 2027, with full implementation potentially stretching to 2029. The bank linked the slower timeline to election-year incentives and a fight over ethics provisions that has added friction to negotiations.
Two practical constraints sit at the center of that timeline view. The 2026 midterm cycle can reshape lawmakers’ incentives, and the Senate’s effective 60-vote threshold to clear a filibuster makes bipartisan alignment necessary but easy to break.
TD Cowen said U.S. crypto market structure legislation could see progress this year, but is more likely to pass in 2027, with final rules potentially taking effect as late as 2029. The note said a key hurdle is debate over conflict-of-interest provisions, with Democrats seeking…
— Wu Blockchain (@WuBlockchain) January 6, 2026
The Calendar Problem: Midterms Change Incentives
TD Cowen’s view is that the midterm clock makes 2026 a difficult year for decisive floor action. The note suggested Democrats may prefer to delay firm commitments until after the 2026 elections to preserve leverage if control of the House or Senate changes later in the year. That strategic posture increases the odds that substantive votes slip out of 2026.
The Senate math compounds the timing risk. The note highlighted the 60-vote hurdle as a quantitative bottleneck, where even a technically complete draft can stall without dependable cross-party support. In that setup, coalition management becomes as important as drafting the bill itself.
Ethics Rules Are the Sticking Point
A major sticking point is a proposed set of conflict-of-interest rules focused on senior officials and their families. TD Cowen flagged these ethics provisions as a meaningful negotiating hurdle, with some Democrats treating immediate enforcement aimed at specific actors as essential while others see the clauses as a “nonstarter” for quick passage.
That disagreement changes the nature of the negotiation. It expands the debate beyond technical market-structure design into questions of retrospective restriction and political accountability, which makes timelines harder to model and increases the likelihood of phased implementation or carve-outs.
For investors and product teams, the practical consequence is a longer runway of uncertainty. If federal clarity slips beyond 2026, trading desks, custody providers, and compliance teams may need to extend contingency planning and treat 2027 as a planning parameter rather than a promised deadline. Operationally, custody, reporting, and onboarding processes built around near-term federal standardization will carry higher variance. That reality pushes firms toward cross-jurisdictional scenarios and more frequent control updates as negotiations evolve.
Looking ahead, the next focal point is the midterm outcome and the legislative session that follows. If post-election alignment shifts—or if the ethics language is revised—the probability distribution for passage and implementation timing will change, with downstream effects on compliance scheduling and capital allocation decisions.
