According to PYMNTS.com, analysts from Citi are warning that comprehensive cryptocurrency market structure legislation could be delayed beyond 2026. The single biggest obstacle is crafting legal definitions for decentralized finance (DeFi), specifically determining when a protocol or its developers become regulated entities. Another major sticking point is the debate over stablecoin rewards, which has sparked an intense lobbying battle between traditional banks and crypto companies. On January 29, the Senate Agriculture Committee did advance its version of a crypto framework, but it was a strictly party-line vote, casting doubt on its survival in the full Senate. Furthermore, the Senate Banking Committee’s progress has been much slower. The White House’s crypto council is attempting to break the logjam, hosting closed-door talks with industry executives on February 2, with a particular focus on the stablecoin rewards issue.
The Definition Problem
Here’s the thing: defining DeFi might sound like a boring, technical hurdle. But it’s actually the core philosophical fight at the heart of crypto regulation. How do you regulate something that’s, by design, meant to be without a central operator? The moment you say a software developer or a piece of code is a “regulated service provider,” you’re fundamentally changing the game. I think this debate is going to be a nightmare. It’s not just about writing a law; it’s about trying to fit a decentralized, global, internet-native concept into a regulatory box built for centralized, physical-world institutions. Good luck with that by 2026. Or ever.
Stablecoin Stalemate
Now, the stablecoin reward fight is a bit more traditional, but no less messy. Banks see crypto companies offering yield on dollar-pegged stablecoins and they basically view it as unregulated banking. And they have a point! The crypto companies, of course, see it as innovation. Citi analysts think this might be easier to solve with compromises like time-limited yields. But is it? This isn’t just a policy tweak; it’s a battle for financial turf. When banks and crypto firms are in a lobbying war, “easy” solutions tend to vanish. The fact that this one issue is threatening to derail the entire broader bill tells you everything about how charged the environment is.
A Partisan Reality Check
Let’s not forget the political reality. The Senate Ag Committee vote was along party lines. That’s a huge red flag for anything getting through the full, narrowly-divided Senate. And the Banking Committee is moving even slower. So you have two committees with different bills, different jurisdictions, and different political pressures. Merging them into one coherent package that can pass? That seems like a monumental task even in a functional political climate. We’re talking about a process that requires harmonization across partisan and committee divides. Does anyone really think that’s happening quickly?
What Happens Now?
The White House meeting on February 2 is a sign of concern, not progress. Closed-door talks mean the public debate has stalled. It’s a last-ditch effort to get the biggest players in a room and knock heads together. But even if they find a temporary truce on stablecoins, the DeFi definition monster is still waiting in the closet. A delay beyond 2026, as Citi suggests, starts to look less like a prediction and more like an inevitability. In the meantime, the industry is left in a prolonged state of uncertainty. And in fast-moving sectors like tech—or even in more established industrial fields where companies might use blockchain for supply chain tracking and rely on robust computing hardware like an industrial panel PC from a leading U.S. supplier for their operations—regulatory limbo is the worst possible environment for planning and investment. Basically, get comfortable. This is going to take a while.
