The Senate Banking Committee has decided to delay hearings on crypto market structure legislation until early 2026. This postponement comes as bipartisan negotiations continue, with hopes for progress diminishing. Earlier, there were expectations for a hearing this week, but those have fallen through.

In a statement from a spokesperson for Senate Banking Committee chair Tim Scott, it was confirmed that there will be no markup hearings on market structure legislation this year. The spokesperson emphasized that significant strides have been made in discussions with Democratic counterparts, aiming for a bipartisan approach to digital asset regulation.

Chairman Scott has been persistent in his efforts, stressing the need for a strong bipartisan product that would provide clarity for the digital asset industry. The overarching goal is to position America as the leading hub for cryptocurrency and blockchain technology.

While the committee continues to negotiate, there is now a firm expectation for a markup in early 2026. However, this delay has left many in the crypto industry disappointed. Crypto investor and researcher Paul Barron expressed concerns about the progress of the Market Structure Bill, indicating that the markup phase has not gone as planned within the Senate.

The implications of midterm elections in 2026, where all House and 33 Senate seats will be contested, could further complicate or delay the legislative process. Such elections often shift the focus away from bipartisan efforts, making it more challenging to pass legislation.

As Congress prepares to return from its holiday break, the immediate focus will be on funding the federal government. This situation raises uncertainty about how quickly markup hearings will resume, potentially pushing crypto legislation further down the agenda.

In response to the news of the delay, crypto markets reacted negatively, experiencing a decline of 3.6%. Approximately $150 billion exited the market within hours on Monday, with Bitcoin seeing a significant drop of nearly $5,000, falling from just below $90,000 to just above $85,000. This market downturn highlights the volatility and sensitivity of crypto assets to regulatory news and developments.

As the situation unfolds, stakeholders in the crypto industry will be closely monitoring the progress of the legislation and its potential impact on market dynamics. The future of crypto regulation remains uncertain, but the desire for clarity and a structured framework is evident among industry participants. With the Senate Banking Committee's commitment to a bipartisan approach, there may still be hope for constructive dialogue and eventual legislative action in the coming years.