A long-awaited effort to establish clearer rules for the US crypto market is facing growing political and industry resistance, and may only move forward if President Donald Trump steps in directly. That is the assessment from TD Cowen, which says deep divisions among stakeholders and a narrow path through Congress are slowing progress on crypto market structure legislation.
In a note released Monday, Jaret Seiberg, managing director at TD Cowen’s Washington Research Group, said the bill is unlikely to advance without what he described as “President Trump’s personal intervention.” According to Seiberg, only direct pressure from the White House could push the crypto and banking sectors to make the compromises needed for legislation to gain momentum on Capitol Hill.
His comments came as David Sacks, the White House’s crypto policy lead, convened a meeting with banking trade groups, crypto industry representatives, and Coinbase to explore possible middle ground on unresolved issues tied to market structure rules.
Stablecoin rewards remain a central dispute
One of the most contentious issues remains how stablecoin rewards should be regulated. Banks, particularly community lenders, argue that allowing crypto platforms to offer rewards or interest on stablecoins without firm limits could draw deposits away from traditional institutions. They warn that this could weaken smaller banks that rely heavily on consumer deposits.
Crypto firms see the issue differently. Some, including Coinbase, contend that banks are overstating the risks in an effort to curb competition. They also note that stablecoin rewards were already addressed during negotiations around the GENIUS Act, which became law last July.
Seiberg believes the debate is less about whether stablecoin rewards will be allowed and more about timing and oversight. In his view, payments tied to stablecoins are likely inevitable. The real questions are when platforms would be permitted to offer them and what regulatory standards they would need to meet.
From the banking industry’s standpoint, stablecoins are not expected to significantly disrupt deposit pricing until they are widely used for everyday transactions. Before that happens, Seiberg suggests stablecoins pose a bigger competitive challenge to money market mutual funds than to banks themselves.
Divisions inside the crypto industry
The path forward is also complicated by disagreements within the crypto sector. Seiberg points out that legal uncertainty has acted as a barrier to entry, which has benefited some established platforms by limiting competition. Clearer market structure rules could open the door for regulated institutions, including large banks and broker-dealers, to expand their involvement in digital assets.
At the same time, some crypto firms may feel less urgency for new legislation. Regulators such as the Securities and Exchange Commission and the Commodity Futures Trading Commission are already moving toward policy outcomes the industry has long sought. That regulatory progress could reduce pressure on Congress to act, at least from certain corners of the market.
Senate math and Democratic demands
Despite industry disagreements, TD Cowen sees the political landscape as the biggest hurdle. Passing a crypto market structure bill in the Senate would require support from as many as 10 Democrats, a challenging threshold given current tensions.
Democratic lawmakers are expected to push for stronger investor protections, tougher anti-money-laundering and Bank Secrecy Act requirements, and stricter rules around conflicts of interest. These provisions could face resistance from crypto companies that view them as overly restrictive.
Another sensitive issue is ownership and influence. Democrats are likely to insist on language that would bar the president, senior government officials, and their families from owning or controlling crypto businesses. According to Seiberg, this concern has gained new attention following a Wall Street Journal report alleging that an Abu Dhabi royal agreed before Trump’s inauguration to invest $500 million in World Liberty Financial. While the report has not been independently confirmed, its publication has intensified scrutiny and hardened positions.
A narrowing path forward
TD Cowen is not ruling out the possibility of legislation in 2026. Seiberg notes that progress remains possible if the industry aligns its priorities and Republicans offer enough concessions to win Democratic votes. Still, he cautions that the overall trajectory is becoming more difficult.
Rather than building momentum, negotiations are encountering more friction, both politically and commercially. Without strong leadership to bridge the gaps, the chances of near-term success appear limited.
