Investment bank TD Cowen reportedly warned that the 2026 midterm elections in the United States could pull support needed to pass a digital asset market structure bill under consideration in the Senate.
According to reports, TD Cowen’s Washington Research Group said on Monday that the market structure bill, named the CLARITY Act when passed by the US House of Representatives in July but called the Responsible Financial Innovation Act in the Senate, was more likely to pass Congress in 2027, with final implementation potentially in 2029.
According to the investment bank, Senate Democrats could withhold support for the bill with elections that could potentially change the balance of power in Congress, currently favoring Republicans. The lawmakers could delay or stall on the bill until after the midterms, after which time another party may be in the majority.
“Election outcomes are always uncertain, which is why Democrats may cut a deal,” said the report.
In a bipartisan draft of the market structure released by the Senate Agriculture Committee in November, lawmakers included “conflict of interest safeguards” that could prevent government officials, US President Donald Trump and members of his family from holding cryptocurrencies or being directly involved with the industry.
Related: How market structure votes could influence 2026 crypto voters
Many House and Senate Democrats have raised concerns about Trump’s ties to the crypto and blockchain industry as Congress considers the market structure bill. Potential conflicts of interest from either the president or through his family include involvement in the crypto platform World Liberty Financial, the pardoning of former Binance CEO Changpeng Zhao, the crypto mining company American Bitcoin and Trump’s memecoin, Official Trump (TRUMP).
TD Cowen added:
“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.”
The Responsible Financial Innovation Act awaits markups in the Senate Banking Committee and Senate Agriculture Committee before possible consideration in the full chamber. Reports signaled that the Banking Committee was preparing for a markup in the second week of January.
If signed into law, the bill is expected to give the US Commodity Futures Trading Commission more authority over digital assets, shifting regulatory power from the Securities and Exchange Commission. Both agencies have only Republican commissioners as of January following the departure of the SEC’s Caroline Crenshaw, with Trump not having announced any potential replacements for Democratic seats.
