The morning sun lights up the sky behind the U.S. Capitol on November 2, 2026 in Washington, DC.
Countess Djemal | AFP | Getty Images
A Democratic parliamentary victory is likely to reset the political calculus on cryptocurrencies, ushering in a more adversarial approach in Washington and putting industry-friendly legislation like the Clarity Act on the back burner.
With crypto critics like Sherrod Brown (D-Ohio) returning to the Senate and Sen. Elizabeth Warren (D-Mass.) retaining significant influence over monetary policy, analysts expect the new Congress will likely focus on scrutinizing President Donald Trump’s personal crypto transactions over industry support legislation.
For years, cryptocurrencies have struggled in Washington for clear operating rules, often ending up regulated by enforcement agencies. Things changed after Trump won the election in 2024, giving the industry a reprieve and a seat at the policy table.
“We see Sherrod Brown’s victory in Ohio as damaging to the crypto industry’s political influence as the industry worked to defeat him,” TD Cowen Washington analyst Jarrett Seiburg said in a note Wednesday. “We didn’t expect Clarity to be able to move forward in the next two years. This gives us even more confidence in our forecast.”
The crypto industry spent more than $200 million to sway the midterm elections in hopes of electing leaders who can push a comprehensive crypto market structure bill across the finish line after the Clarity Act stalled in the Senate.
Seiburg stressed that Democrats will “investigate Mr. Trump’s crypto entanglements, including World Liberty Financial,” adding that “the resulting political environment may make it impossible to advance a version of clarity that the crypto sector can support.”
The stakes extend beyond market structure laws, through transparency laws or alternative versions thereof. Stablecoin innovation, decentralized finance (DeFi) development, access to banking, tokenization, and smart taxation are priorities that the industry considers critical to keeping the United States competitive in the global crypto economy.
The industry needs continued bipartisan engagement to ensure that changing political dynamics do not override these priorities. Democrats have also historically been less supportive of cryptocurrencies than Republicans, but that gap has narrowed as more Democrats embrace the industry.
The effects of the Democratic Party’s big victory are not all bad. Cryptocurrencies have reached a level of financial integration that may be difficult to reverse, and the future is increasingly focused on establishing cryptocurrencies as financial infrastructure. Although the CLARITY Act may be delayed until 2028, major financial regulators can help advance the industry through rulemaking.
Kara Calvert, vice president of U.S. policy at Coinbase, said the election results signal a historic shift in the composition of the next Congress, with a record number of pro-crypto voices expected to join its ranks.
“With last night’s results, the 120th Congress will have more new professional crypto members than any previous freshman class,” she said. “Cryptocurrency is 100% bipartisan, which is why the future of finance is not dependent on one political party or a single election night. Democrats and Republicans alike know that clear rules protect consumers and preserve American innovation.”
As of Thursday morning, 19 candidates have been elected to the Senate that the advocacy nonprofit Stand With Crypto describes as pro-cryptocurrency candidates, compared to eight Senate candidates that the advocacy group Stand With Crypto describes as anti-cryptocurrency candidates. In the House of Representatives, there are 228 pro-crypto candidates, compared to 106 candidates the group considers anti-crypto.
Some races have yet to be called, but FairShake, a super PAC launched in 2023 to support nonpartisan, pro-crypto candidates, has so far won 29 of the 34 races it has spent, including three of the six House candidates it prioritized, spending a base amount of $1 million on campaigns, according to Reuters.
Dante Disparte, Circle’s chief strategy officer and head of global policy and operations, emphasized Circle’s bipartisan approach and readiness for new leadership in the Senate and House of Representatives.
“In the wake of these midterm election results, people need to understand that they have some level of fairness in this process, that their interests are represented in this process, so it may take longer to get clarity back on the table,” he said. “But I wouldn’t say it’s bad. Frankly, the reaction from the industry and other players has been too knee-jerk…Cryptocurrency is purple.”
He also pointed to the Genius Act, a “bipartisan and harmonious” stablecoin law passed last year and scheduled to go into effect in January. He said the legislation is an important policy advance and “given that so many members have come to the crucible of public policy discussions, (Democrats) will 1. move beyond ownership and 2. recognize.”
This bipartisan support may provide a blueprint for what happens next, but progress could continue even if the crypto law stalls, said Joseph Chalom, CEO of Ethereum financial firm Sharplink.
“We expect the CLARITY Act to be on hold until 2028. Still, there is a clear path forward for stablecoins and public equity tokenization under the SEC’s five-year innovation exemption,” he said. “Advances in technology are unlikely to be reversed. Once the benefits of faster payments, lower costs, and markets that never close become clear to investors and institutions, this change will be very difficult to reverse, regardless of who wins the White House in 2028.”
