Crypto bill faces years-long delay as Trump-era conflict rules stall progress

TD Cowen says U.S. crypto market structure reform likely slips to 2027–2029 as Democrats push Trump-focused conflict rules and CLARITY Act talks become the fallback.

Summary

• TD Cowen expects comprehensive U.S. crypto market structure legislation to miss 2025 and likely pass around 2027, with full implementation closer to 2029.​
• Democrats want strict conflict-of-interest rules barring senior officials, including President Trump and his family, from owning or running crypto firms, a red line for Republicans.​
• Lawmakers may keep negotiating around the CLARITY Act in 2026, using it as a narrower path to regulatory progress while broader ethics fights remain unresolved.​

The Clarity Act structure legislation is unlikely to pass in 2025, with meaningful progress now expected to slip into 2027, according to a report by TD Cowen. Full implementation of final regulatory rules could be delayed until 2029, the firm stated.

Clarity Act, 2027?

TD Cowen identified a conflict-of-interest dispute as the primary obstacle preventing near-term passage. Democratic lawmakers are pushing for strict ethics provisions that would bar senior government officials from owning, operating, or benefiting from cryptocurrency businesses, according to the report. These provisions explicitly reference concerns involving President Trump and members of his family.

The disagreement has created a legislative impasse, as Republicans oppose ethics language that would immediately apply to the current administration, while Democrats insist such safeguards are necessary for the bill’s credibility, TD Cowen reported.

To resolve the standoff, TD Cowen outlined a possible compromise: delaying the enforcement of conflict-of-interest provisions by approximately three years. Under this framework, the broader crypto market structure bill could move forward without the ethics restrictions applying during the current Trump administration. Such a delay would allow lawmakers to establish a regulatory framework while postponing the most politically sensitive elements until a later administration, according to the analysis.

The report also highlighted political calculations shaping the timeline. Analysts noted that Democrats may have little incentive to accelerate passage in 2026 if they believe there is a realistic chance of regaining control of the House of Representatives in the upcoming midterm elections. A shift in congressional power could allow them to revisit ethics provisions under more favorable conditions, TD Cowen stated.

Despite expectations for broader delays, TD Cowen emphasized that lawmakers are not stepping away from crypto regulation entirely. Work is expected to continue in early 2026 on the CLARITY Act, which remains a central component of the broader market structure effort and a focal point for ongoing negotiations, according to the report.

The analysis suggests that while regulatory momentum is building, the most consequential changes to U.S. crypto market structure remain several years away.