The Impending Crypto Market Structure Bill: A Make-or-Break Moment for Institutional Crypto Adoption in 2026

The U.S. crypto market structure bill, formally the Digital Asset Market Clarity (CLARITY) Act of 2025, has emerged as a pivotal piece of legislation with the potential to redefine institutional participation in digital assets. As of December 2025, the bill has passed the House but remains in flux in the Senate, where political gridlock and unresolved regulatory debates threaten its timely passage. For institutional investors, the bill's success-or failure-could determine whether crypto transitions from a speculative niche to a mainstream asset class.

Regulatory Clarity: A Double-Edged Sword

The CLARITY Act aims to resolve jurisdictional ambiguities between the SEC and CFTC, granting the latter exclusive authority over digital commodity spot markets while the SEC retains oversight of investment contracts according to the policy tracker. This framework, if enacted, would provide much-needed clarity for institutional investors, who have long been wary of regulatory arbitrage and inconsistent enforcement. According to a Bloomberg report, 86% of institutional investors already have exposure to digital assets or plan to by 2025, with 60% preferring registered investment vehicles to gain exposure. However, unresolved issues-such as how to define "decentralized enough" for DeFi platforms and whether yield-bearing stablecoins should be regulated like bank deposits-remain contentious, creating a "regulatory fog" that deters capital flows as The Block reports.

The recent approval of the GENIUS Act, which established federal oversight for payment stablecoins, has partially alleviated concerns about systemic risks according to Lexology. Yet, without a comprehensive market structure bill, institutional investors face lingering uncertainties. For instance, the lack of clear bankruptcy procedures for digital asset issuers and anti-money laundering (AML) requirements for decentralized protocols could expose investors to unforeseen liabilities as Fireblocks notes.

The 2026 Mid-Term Election Wild Card

The timing of the bill's passage is heavily influenced by the 2026 mid-term elections. Lawmakers are under pressure to finalize the legislation before election season intensifies, as attention shifts to re-election campaigns. According to The Block, there is a 50% to 60% chance of the bill passing in 2026. However, political dynamics complicate this timeline. The CFTC's current lack of full commission members-due to several commissioners leaving or planning to leave-has made Democrats hesitant to grant the agency broader crypto authority as The Bulldog Law reports. Additionally, potential conflicts of interest related to President Trump's involvement in DeFi and stablecoin projects have added another layer of complexity as The Block notes.