Crypto industry sources who spoke with The Block this past week said crypto market structure legislation is hung up on two major sticking points — how to treat stablecoin yield and how to address President Donald Trump’s conflicts of interest in crypto.
A Senate Banking Committee hearing on Thursday morning with SEC Chair Paul Atkins will be telling on where Democrats stand on ethics.
Crypto industry views diverge sharply on the likelihood that Washington will pass sweeping digital asset legislation in 2026, with estimates ranging from 25% to 60% following a turbulent start to the year.
Ron Hammond, head of policy and advocacy at Wintermute, gave those odds a 25%.
Crypto industry sources who spoke with The Block this past week said crypto market structure legislation is hung up on two major sticking points: how to treat stablecoin yield and how to address President Donald Trump's conflicts of interest in crypto. If passed, a bill would broadly regulate the crypto industry, in part through designating jurisdiction between the U.S. Securities and Exchange Commission and the Commodity Futures Commission, new disclosure requirements, and other standards.
That's even higher among some of my peers," Hammond said in an interview.
Bank and crypto representatives met at the White House this week for the second time this month in an effort to narrow their differences.
Stablecoin rewards have emerged as the central flashpoint between banks and segments of the crypto industry. Banking groups have criticized a stablecoin law that passed over the summer, called GENIUS. Banks say allowing stablecoin yields could draw deposits away and harm community banks. Still, some in crypto argue that the issue has already been debated and accuse banks of trying to curb competition. Industry meetings on rewards are happening almost daily, one source familiar with the matter told The Block.
According to one source familiar with the talks, crypto stakeholders "really dug in," strongly pushing back against several of the banking sector’s proposals.
During the meeting, banks proposed a set of principles, calling for strict restrictions that go beyond the latest draft of a crypto market structure bill. A previous Senate Banking Committee version would bar yields or interest for passive stablecoin holdings but would allow narrower, activity-based rewards or incentives.
"If banks want a change, if they want rewards more limited, then they need a bill," he said in an interview. "So in some sense, banks need a market structure bill just as much or even more than crypto does."
Still, Kevin Wysocki, head of policy at Anchorage Digital, said he believes there will be a solution to the stablecoin issue. If the current law remains unchanged, stablecoin rewards would continue to be governed by the GENIUS Act, which bars issuers from paying direct interest to holders but does not prohibit third-party platforms, such as Coinbase, from offering rewards.
Wysocki put the odds of passage in 2026 at 50%. "I think it's because the banks need it," he said, adding that people in crypto also really want a bill to pass into law.
A source familiar said stablecoin rewards were the biggest issue right now and that there will not be support from Republicans until the issue is addressed.
There needs to be a deal," that source said. "The conversation needs to turn from principles to redlines to actual text and proposals."
The clock is ticking," they added. They gave the chance of a bill passing into law in 2026 a 60%."
Beyond policy disagreements, ethics questions tied to Trump’s crypto ventures are further complicating the bill’s path.
The Senate Banking Committee's hearing on Thursday morning with SEC Chair Paul Atkins will be telling on where Democrats stand on ethics, Wintermute's Hammond said. On Wednesday, Atkins faced intense questioning from Democrats in the House Financial Services Committee over the SEC's steep decline in digital assets and Trump's ties to the crypto industry.
Trump has raked in about $1.4 billion from his crypto ventures, including from World Liberty Financial, Bloomberg estimated last month. The Trump family also holds a 20% stake in the mining firm American Bitcoin
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For better or for worse, the president's involvement and the family's involvement in the crypto industry, there has been a very mainstream narrative around the corruption of this administration, or perceived corruption tied to a lot of the crypto industry itself," Hammond said
The Senate Banking Committee may decide not to bring up ethics. The committee's chair, Tim Scott, told CoinDesk that language should instead go through the ethics committee.
The looming midterm elections add another layer of uncertainty. Already, crypto-focused political action committees are amassing millions to prepare.
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