There were no fare increase hearings on market structure legislation last week. Lawmakers remain steadfast. The question is changing from “Can we get a market structure law this year” to “Will Congress have enough time to push this bill across the finish line?”
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narrative
The Senate Banking Committee revealed this week that it will not hold a markup hearing on its draft market structure legislation, confirming what many suspected — that lawmakers would not have enough time to get the bill passed this year.
why this is important
The Market Structure Bill has been further delayed until 2026, making it more likely that it will not be passed at all. In order for it to become law, lawmakers will need to act immediately after the holidays and work to complete the process before starting the 2026 midterm elections. In the interim, they will need to contend with the possibility of another government shutdown, the complexity posed by the two parts of the market structure bill being split into two different committees, and the fact that each party is further entrenching itself, said multiple people tracking the process.
break it down
The Senate Banking Committee had hoped to hold some form of hearing, if not an actual markup, by the end of last week, but last Monday, Chairman Tim Scott’s office issued a statement confirming that would not happen and saying he looked forward to further cooperation in 2026.
“From the beginning, Chairman Scott has been clear that this effort should be bipartisan,” a spokesperson for the committee said in a statement. “He has consistently and patiently engaged in good-faith discussions to produce strong bipartisan products that provide clarity to the digital asset industry and make the United States the cryptocurrency capital of the world. The committee is continuing negotiations and looks forward to implementing a markup in early 2026.”
As four people following the process described to CoinDesk, there are several major sticking points: how decentralized finance (DeFi) is defined and regulated; how stablecoin yields should be treated; whether major regulatory agencies such as the Securities and Exchange Commission or Commodity Futures Trading Commission will have bipartisan commissioners; and whether lawmakers can hold President Donald Trump to any type of ethics agreement. These are not just political issues for lawmakers to discuss; some of them, like the way DeFi is regulated, have technical implications for parts of the broader cryptocurrency industry, and poor definitions of “decentralization” may be difficult to amend in future laws.
These are not new problems either. As CoinDesk has reported multiple times, these issues have been at the center of negotiations for months, even as lawmakers attempted to hold a key hearing on the price increase before Congress went on holiday. A markup is a formal hearing in which lawmakers propose amendments to change legislation and then vote on whether to send it to the rest of the House for a broader vote.
Not discussing it could end up being a blessing in disguise, two people familiar with the matter said. A markup would leave the bill’s text vulnerable to attacks by opponents in the coming weeks or force a more partisan bill to fail to pass the full Senate.
“It would be best not to raise the bill because, given the government shutdown and other factors, there won’t be enough time for both sides to reach a compromise and the hike will be shared by both parties,” one of the people said. “If a hike occurs this year, I believe it will almost certainly be along party lines, which really hurts the bill’s potential to gain enough support.”
There is clearly bipartisan interest in working together on this legislation. The House has passed its own market structure bill in an overwhelmingly bipartisan vote, although the Senate has largely ignored the bill’s existence and spent the past five months cobbling together its own version — albeit one that echoes the House’s Digital Asset Market Clarity Act.
Decentralized Finance
Two people said that although the cryptocurrency industry is pushing for very limited regulation of DeFi in the bill, this is not a realistic outcome. Senators such as Mark Warner, the top Democrat on the Senate Intelligence Committee, have national security concerns and would like to see some kind of DeFi guardrails before voting for the bill. Specifically, Warner wants to see anti-money laundering issues robustly addressed.
“There are some real questions about what the federal government’s ability is to blacklist protocols and wallets and so on and put regulatory boundaries around DeFi,” one of the people said. “We’re looking at both of those, what do we want to do and what can we do? If there’s nothing, then at least, you’re not going to get Democratic support.”
There are also concerns about regulatory arbitrage by traditional financial firms, although one of the people said these concerns may stem more from an anti-competitive stance (as these businesses don’t want to compete with DeFi) than an actual consumer protection perspective. Still, legacy companies are lobbying lawmakers on the legislation, and their concerns may be addressed in any final bill.
Another person familiar with the matter said that concerns about DeFi are likely to be the reason for the rising bills. They said that while some Democrats want to support the cryptocurrency bill, those on their left will not want them to and will put pressure on more moderate lawmakers. But on the other hand, any strict regulation of DeFi will cause the bill to lose industry support.
“People are going to be very angry about any deal because one side doesn’t want DeFi to exist and the other side wants DeFi to be completely unregulated,” the person said. “The middle will be some level of regulation of what we call DeFi. In order to get a deal, everyone has to be a little unhappy.”
role of president
Trump remains an unknown quantity in these negotiations. Asked at a White House event whether Democrats would be appointed to regulatory agencies such as the Securities and Exchange Commission and the Commodity Futures Trading Commission, which intend to have bipartisan commissioners, he said the answer was probably no.
“Well, do you think they’re going to appoint a Republican? [if it] Is it up to them? “So, you know, we’ll think about it,” Trump said. We want fairness, but they generally don’t appoint Republicans. “
Traditionally, Democratic presidents appoint Republicans to the SEC and CFTC; Commissioner Hester Peirce, for example, was originally nominated by former President Barack Obama.
“We do focus on certain areas, we do share and share power in certain areas, and I’m open to that,” Trump said.
The broader issue may be moral concerns among Democrats. Democrats have made clear for months that they want to impose restrictions on the Trump family’s relationship with cryptocurrency. Although the White House insists there is no conflict of interest issue, Senator Cynthia Lummis said at the Blockchain Association’s annual summit earlier this month that she has been negotiating with the White House on behalf of Democrats to try to get the White House to agree to an ethics provision.
“The White House countered, ‘You can do better,’ so the White House couldn’t accept that,” she said on stage.
Some kind of compromise is required. Two of the people said that while some Democrats want to support the bill, they need to be able to show voters that they can impose some restrictions on Trump and his family’s business interests or risk facing attacks from the left again. This is a particularly concerning issue as candidates for the 2028 presidential election prepare to formally announce their candidacy.
If Congress can resolve other outstanding issues, they might be able to convince the White House to support some kind of ethics provision and view it as an opportunity to actually win the bill rather than let jobs slip away, one of the people said.
time limit
Two of them said at least one of the drafts will be marked up next month. What’s less clear is the bill’s path to the Senate. Both the Banking Committee and the Agriculture Committee need to mark up their respective bills and then reconcile the differences between the drafts. The Senate could vote on the overall bill, which would then go to the House, where it could pass it and then go to the White House for Trump’s signature.
If the bill doesn’t get any kind of markup by the end of January, “I think the likelihood of overall passage is going to be significantly lower,” one of the people said. Another said they were hesitant to put a firm timetable on when the price increase would happen, but said the bill would need to pass the Senate by April or the chances of it becoming law in 2026 are slim.
Complicating matters, Congress will be focused on funding the government as it returns from the holidays. The continuing resolution to end the last government shutdown expires on January 30. If Congress fails to agree on a new resolution or budget, the government risks another shutdown, which would further delay progress on market structure legislation.
As CoinDesk’s Jesse Hamilton also noted, the further away we are from 2026 and the congressional elections, the more likely it is that lawmakers will choose to delay any legislation until they see the results of the polls next November. If Democrats win control of the House, any bill must adhere to their priorities.
Regardless, the bill is not dead yet. A January hike is likely to happen — White House crypto and AI czar David Sacks said in a tweet late Thursday that Senators Scott and John Bozeman “confirmed a January hike” for Clarity, though it’s not yet scheduled — and the Senate will vote soon, especially if both committees do the hike at the same time.
this week
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