TD Cowen Warns Midterms Could Stall Crypto Market Structure Push

• US Democrats could block the crypto market structure bill in the Senate until after the midterm elections in November, when the party has a strong chance of regaining control of the House, according to investment bank TD Cowen.
• The bank said the bill may not pass into law until 2027 and its full implementation could be delayed until 2029.

Political manoeuvres by the US Democratic Party could delay passage of the much-anticipated crypto market structure bill (CLARITY Act) until 2027, investment bank TD Cowen said in a Monday note.

Achieving bipartisan consensus and getting the bill passed before the US Midterm elections in November 2026 could be a tall order, TD Cowen warned. The financial services firm had said in late 2025 that Senate Democrats “are not interested in moving quickly.”

This week the bank’s research arm, led by Jaret Seiberg, reiterated that the Democrats’ belief in their chances to regain control of the House in November could stall progress. TD Cowen said the legislation’s full implementation could stretch out to 2029. 

It’s currently a toss-up for which party is best-placed to wrest control of the House. However, low approval ratings for President Donald Trump and recent Democratic victories, such as the election of Zohran Mamdani in New York, bode well for the Democrats’ prospects.

Election outcomes are always uncertain, which is why Democrats may cut a deal.

Jaret Seilberg, TD Cowen

“That could happen quickly, as staff have been working on the technical language for months,” Seiberg wrote. 

Related: Trump Family Nets $1.3B Boost from Bitcoin Ventures and DeFi Gains

A key sticking point for Dems is the inclusion of provisions designed to reduce conflicts of interest arising from government officials, including President Donald Trump and his family, profiting from crypto projects. That would be a “nonstarter” for Trump, according to Seiberg. 

Time favors enactment as the problems disappear if the bill passes in 2027 and takes effect in 2029. Crypto would need to accept that the presidential election could impact the final rules, and Democrats would need to accept that the conflict provision will not apply to Trump.

Jaret Seilberg, TD Cowen

Revision Process Already Underway in 2026

While the CLARITY Act was passed by the US House of Representatives in mid-2025, ongoing debate over the bill’s inclusions meant it didn’t proceed to a vote in the Senate. In the Senate, the bill is named the Responsible Financial Innovation Act. 

Related: Goldman Sachs Sees Regulatory Shift Fuelling Next Phase of Crypto Adoption

Senators from both parties met again on Tuesday, 6 January, to relaunch talks over the market structure bill. While no official announcement has been made on the next step in the negotiations, Republican Senator John Kennedy reportedly told a Punchbowl News journalist that a bill markup (a session where senators debate amendments) would happen “next week”.

“My understanding is that the chairman is gonna have a vote, come hell or high water, on Thursday for the next week,” Kennedy reportedly said.

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