Tokenization and stablecoins may weather Democrats' sweep as broader crypto rules face uncertainty
Efforts to tokenize securities and expand stablecoin payments may continue under existing laws despite Democrats' midterm gains, while broader crypto rules face uncertainty.
Wall Street's plans to put stocks, bonds and funds on blockchain rails, along with growing stablecoin payments businesses, may have a better chance of weathering Democrats' midterm sweep than other corners of crypto. Both can move ahead under existing laws, even as Washington's broader digital asset agenda and President Donald Trump's claim to make the U.S. the world's crypto capital face a tougher political landscape, industry experts told CoinDesk Wednesday.
Tokenization continues
Peter Curley, head of global regulatory affairs at tokenization firm Ondo Finance, said he expects the SEC and CFTC to face more congressional questioning but sees little reason for tokenized securities to grind to halt.
The agencies have already made substantial progress without new legislation, and we expect that work to continue, particularly in tokenized securities and derivatives markets where established regulatory frameworks already exist.
Progress in tokenized financial markets could follow a different timetable from the broader crypto policy debate, he added. Aaron Kaplan, CEO of regulated digital asset firm Prometheum, also expects business to continue. Broker-dealers are exploring crypto offerings for brokerage accounts, securities issuers are developing tokenization strategies and international trading venues are looking at the Depository Trust & Clearing Corp.'s (DTCC) tokenization service as a route to offering tokenized U.S. equities abroad.
Stablecoin framework
Stablecoins offer another example of how earlier legislative progress could insulate parts of crypto from political change. The GENIUS Act, which passed with bipartisan support in 2025, created a federal framework for payment stablecoins, requiring issuers to back their tokens with liquid reserves and comply with federal or state oversight.
Abhishek Vaidyanathan, chief legal officer of the NEAR Foundation, noted that the legislation has bipartisan backing and a clear implementation date.
GENIUS passed with Democratic votes and takes effect on January 18, fifteen days after the new Congress is seated, so issuers have a statute to work from.
The rest of the market continues on existing law, interpretations and proposed rules, he added.
Regulatory uncertainty
U.S. regulatory agencies have spent much of 2026 developing rules without comprehensive legislation, filling gaps left by Congress. The SEC has proposed bringing blockchain tech into transfer-agent rules, an exemption for venues trading tokenized securities and Regulation Crypto Assets. The CFTC has also advanced work on perpetual futures.
Democrats' victory now raises questions about how much of that agenda regulators can finalize before Trump's term ends. Elizabeth Lan Davis, who leads the commodities and derivatives practice at Davis Wright Tremaine and previously served as a chief trial attorney at the CFTC, expects the election to decelerate the agencies' work.
The pace of rulemaking and the finalization of currently proposed rules for all of these areas will likely slow dramatically, especially if Democratic commissioners are appointed.
Kris Swiatek, a partner at Seward & Kissel, sees less disruption, noting that Democratic control will likely bring greater scrutiny but regulators can continue working under existing law. The bigger question is how long the rules will last, as guidance can be withdrawn by a future administration and changes in commission membership could complicate efforts to finalize rules before Trump's term ends.
The Clarity Act faces a tougher path under Democratic control, leaving broader crypto market oversight and protections for decentralized finance (DeFi) developers unresolved. Democratic proposals have sought broader oversight of those who design, control or profit from DeFi applications, raising questions about protections for software developers.
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