There were no markup hearings this past week on market structure legislation. Lawmakers are still holding their firm positions close to the vest. The question is changing from "will 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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Further slippage

The narrative

The Senate Banking Committee revealed this week that it would not be holding a markup hearing on its draft market structure legislation, confirming what many had suspected — that lawmakers just did not have enough time to get this bill over the finish line this year.

Why it matters

The market structure bill slipping further to 2026 makes it that much more likely it just might not pass at all. For it to become law, lawmakers will need to hit the ground running after the holiday break and try to get through the entire process before they take off for the 2026 midterm election. During that time, they'll need to navigate another potential government shutdown, the complication that the market structure bill has two parts coming from two different committees and deal with the fact that the various sides are further entrenching themselves, according to multiple individuals tracking the process.

Breaking it down

The Senate Banking Committee hoped to hold a hearing of some sort — if not an actual markup — by the end of last week, but this past Monday Chairman Tim Scott's office put out a statement confirming this wouldn't happen and saying he was looking forward to further collaboration in 2026.

"From the outset, 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 a strong bipartisan product that provides clarity for the digital asset industry and also makes America the crypto capital of the world. The Committee is continuing to negotiate and looks forward to a markup in early 2026."

There are a few major sticking points, as described to CoinDesk by four individuals who are following the process: how decentralized finance (DeFi) might be defined and regulated; how stablecoin yield should be treated; whether major regulatory agencies like the Securities and Exchange Commission or Commodity Futures Trading Commission will be staffed by a bipartisan slate of commissioners; and whether lawmakers can bind President Donald Trump to any sort of ethics agreement. These aren't just political issues for lawmakers alone to hash out; some of them, like how DeFi is regulated, have technical ramifications for parts of the broader crypto industry, and a poor definition of "decentralization" could be difficult to amend in a future law.

These also aren't new issues. As CoinDesk has reported, repeatedly, these points have been at the crux of negotiations for months, though lawmakers had tried to get to a place where they could hold a crucial markup hearing before Congress breaks for the holidays. A markup is a formal hearing in which lawmakers offer amendments to tweak legislation before voting on whether to advance it to the rest of the chamber for a wider vote.

That being off the table may end up as a blessing in disguise, two of the individuals said. Holding a markup would leave the bill text open to attacks from its opponents over the coming weeks, or force a more partisan bill than could survive the overall Senate.

"It's better that there was no markup, because there just wasn't enough time, given the shutdown and other factors, to get both sides to a compromise where the markup would have been bipartisan," one of the individuals said. "If a markup were to have happened this year, I believe it would have almost certainly have been along party lines, which would have really hurt the potential of the bill getting enough support on the floor."

It's clear there is an appetite for bipartisan cooperation on this legislation. The House has already voted through its own market structure bill with an overwhelming bipartisan majority, though the Senate largely ignored that bill's existence and has spent the past five months cobbling together its own version — albeit with a substantial echo from the House's Digital Asset Market Clarity Act.

Decentralized finance

Though the crypto industry is pushing for very limited DeFi regulations in the bill, this isn't a realistic outcome, two of the individuals said. Senators such as Mark Warner, who is the lead Democrat on the Senate's Intelligence Committee and has national security concerns, will want to see some sort of DeFi guardrails before they vote for the bill. Specifically, Warner wants to see anti-money laundering concerns strongly addressed.

"There are some real questions about what is the capacity of the federal government to blacklist protocols and wallets or whatever, and to sort of put a regulatory perimeter around DeFi," one of the individuals said. "We're looking at both, what do we want to do and what can we do? If there isn't something, then at the very least, you're not going to have Democratic support."

There's also concern about regulatory arbitrage from traditional finance firms, though one of the individuals said these concerns may stem more from an anticompetitive stance (in that these businesses don't want to compete with DeFi) than actual consumer protection viewpoints. Still, traditional firms are lobbying lawmakers on this legislation, and their concerns may be addressed in any ultimate bill.

Another of the individuals said the DeFi concerns may well be what blows the bill up. Though there are Democrats who want to support a crypto bill, their left flank will not want them to and will pressure the more moderate lawmakers, they said. But on the other hand, any strict regulation of DeFi would lose the bill its industry support.

"People are going to get really mad at any deal, because one side doesn't want DeFi to exist, the other side wants DeFi totally unregulated," this person said. "The middle is going to be some amount of regulation of the thing we call DeFi. To get a deal, everyone has to be somewhat unhappy."

The President's role

Trump remains a wild card as well in these negotiations. Asked during a White House event whether he would appoint Democrats to regulatory agencies like the Securities and Exchange Commission and Commodity Futures Trading Commission, which are intended to have bipartisan commissioners, he suggested the answer could be no.

"Well, do you think they would be appointing Republicans [if it] were up to them?" Trump said. "So, you know, we'll look at it. We want to be fair, but typically they're not appointing Republicans."

Democrat presidents have traditionally appointed Republicans to the SEC and CFTC — Commissioner Hester Peirce, for example, was originally nominated by former President Barack Obama.

"There are certain areas that we do look at, and there are certain areas that we do share and share power, and I'm open to that," Trump said.

The broader issue may be Democrats' ethics concerns. Democrats have made it clear for months now that they want to impose guardrails against Trump's family ties to crypto. Though the White House maintains that there are no conflict-of-interest concerns, Sen. Cynthia Lummis, speaking at the Blockchain Association's annual summit earlier this month, said that she had been negotiating with the White House on Democrats' behalf to try and get the White House to agree to an ethics provision.

"The White House kicked it back and said, 'You can do better than this,' so it was unacceptable to the White House," she said on stage.

There will need to be some sort of compromise. While there are Democrats who want to support this bill, they will need to be able to show voters that they were able to put some sort of constraint on Trump and his family's business interests or, again, risk facing attacks from their left flank, two of the individuals said. This is an especially acute concern heading into an election and as candidates for the 2028 presidential election gear up to formally announce their bids.

One of the individuals said that if Congress can sort out the other outstanding issues, they may be able to convince the White House to support some sort of ethics provision, framing it as a chance to actually win on the bill rather than let the work slip away.

Timeline constraints

Two of the individuals said there will be a markup next month, on at least one of the drafts. What's less clear is the bill's path to the Senate floor. The Banking Committee and Agriculture Committee both need to mark up their own respective bills and then reconcile differences between the drafts. The Senate can vote on the overall bill, which would then go to the House which is likely to pass it, and then to the White House for Trump's signature.

If the bill doesn't get any sort of markup by the end of January, "I think the chances go way down" for progress on overall passage, one of the individuals said. Another of the individuals said they were hesitant to put a firm timeline on when markups could happen but said the bill needs to be through the Senate by April, or its chances of becoming law in 2026 were very slim.

Complicating matters is the fact that Congress will be focused on funding the government as it returns from the holidays; the continuing resolution which ended the last government shutdown expires on Jan. 30. If Congress does not come to an agreement on a new resolution or budget, the government risks shutting down again, which would further delay any progress on market structure legislation.

As CoinDesk's Jesse Hamilton also points out, the further into 2026 and the election Congress gets, the more likely it is that lawmakers may choose to just hold off on any legislation until they see the results of next November's poll. If Democrats win control of the House of Representatives, any bill would have to abide with their priorities.

The bill isn't dead by any means. A January markup may well happen — White House Crypto and AI Czar David Sacks said in a tweet late Thursday that Senators Scott and John Boozman "confirmed that a markup for Clarity is coming in January," though one hasn't been scheduled yet — and a Senate floor vote would follow shortly afterward, particularly if both committees mark up at the same time.

This week

This week

• Happy holidays folks!

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