2026 Market Structure Bill Likely to Fail! Crypto Community Divided, Public Trust on the Brink of Collapse

Washington’s crypto lobbying groups are increasingly convinced that the Market Structure Bill may not pass next year. Insiders believe the bill is too complex to be enacted by the Senate before Congress stalls ahead of the 2026 midterm elections. The industry is divided into two factions: some policy leaders think recent SEC and CFTC support for crypto initiatives has reduced legislative urgency, while others warn that failure to pass the bill will expose the industry to political volatility and erode public trust.

Lobbying pessimism and the midterm deadlock

Several closely connected insiders say they believe that, despite positive public signals, the Market Structure Bill will not be passed before the 2026 midterm elections. This pessimism stems from several realistic factors. First, the bill involves highly complex technical issues such as SEC and CFTC regulatory jurisdiction, token security classification, and exchange registration exemptions, which require extensive Senate review and amendments. Second, the bill touches on the boundaries of traditional financial regulators’ authority, whose lobbying power is equally strong and may secretly obstruct progress.

The timing of the midterms is a critical constraint. The November 2026 elections will re-elect all House seats and one-third of Senate seats. Typically, Congress enters a de facto deadlock in the spring of election years because members are busy campaigning rather than legislating. This means the bill must pass the Senate before March 2026, leaving only a few months for legislative action. Considering the House already passed the bill in July 2025, if the Senate fails to do so before the midterms, the entire legislative process may need to restart in the new Congress.

More subtly, some crypto policy leaders are beginning to question whether pushing the bill at this moment is truly that important. One industry executive called colleagues’ insistence on passing the bill in 2026 a “market structure disorder syndrome.” While this phrase is somewhat sarcastic, it reflects genuine internal disagreements: should the industry push hard for legislation or accept regulatory reforms and wait for a better opportunity?

A crypto policy leader bluntly stated, “Once we get the token safe harbor, the market structure is over.” He mentioned a crypto project scheduled for launch in January 2026 that would enjoy SEC exemptions. This view holds that, through accumulated regulatory exemptions and guidance, the industry can substantially gain most of the benefits promised by the Market Structure Bill without enduring a lengthy and uncertain legislative process.

Supporters of the regulatory alternative argue that this approach has several advantages. First, it is faster and does not require the lengthy legislative process in Congress. Second, it offers greater flexibility, allowing regulators to adjust rules dynamically based on market developments without being constrained by rigid laws. Third, it carries lower political risk, avoiding setbacks due to changes in Congress or political winds.

However, this path also has fundamental flaws. Regulatory guidance can be easily overturned by future SEC chairs, whereas legislation offers greater stability and durability. When the government changes again in 2029, a new SEC chair with a pro-crypto stance could revoke all exemptions and guidance established during Atkins’ era. This uncertainty is a core concern emphasized by the legislative camp.

Insiders say, “Regulators are securing key victories for the industry, and these victories will be difficult to dismantle under future administrations. Taking time to shape the market structure is worth it, even if it takes several more years.” This optimistic attitude overlooks political realities: if the Trump administration ends in 2028 and is succeeded by a Democratic government that remains skeptical of crypto, the industry could revert to the regulatory winter of 2022.

Three major risks of the regulatory alternative

High reversibility of policy: Administrative orders and guidance can be easily overturned by future administrations, lacking legal permanence and stability. The 2029 government change could undo all progress.

Lack of perceived legitimacy: Even if regulators de facto permit certain activities, the public and traditional finance institutions may still view the crypto industry as lacking “formal legalization,” affecting mainstream adoption.

Absence of clear legal protections: Companies operating in regulatory gray areas may find that their relied-upon “exemptions” lack legal enforceability if faced with lawsuits or enforcement actions.

Public trust crisis and long-term instability risks

Another faction of crypto policy insiders strongly opposes the regulatory alternative. They warn that if the Market Structure Bill is not passed in 2026, the industry will not only be exposed to future political upheavals but also lose a key opportunity to build public trust. “I cannot overstate how important I think this is,” emphasized a senior crypto policy leader on the necessity of passing the market structure legislation in 2026. They still believe this goal is highly achievable.

This policy leader highlights that the bill could significantly change the current “public perception of cryptocurrencies,” which often views crypto as a suspicious casino. This public trust issue cannot be solved by regulatory exemptions alone. Even if the SEC and CFTC allow certain activities through administrative measures, ordinary investors, corporate clients, and TradFi institutions may still see these as temporary arrangements rather than formal legalization.

The symbolic significance of legislation, in some respects, is even more important than its substantive content. When Congress officially passes a bill, it signifies elected representatives’ recognition of the industry, providing political endorsement that administrative orders cannot. For skeptical investors who still see crypto as illegal or fraudulent, congressional legislation may be the critical threshold for participation.

“Can the current administration do a lot to address these issues? Yes, it can,” the policy leader said. “But can it be as effective as legislation? Absolutely not.” This contrast directly hits the core issue: regulatory reform is only a stopgap measure; true long-term stability can only come from legislation. If the opportunity is missed in 2026, the next legislative window may not open until 2029 or later, during which the industry will continue operating in legal gray areas.