Crypto insiders aren't counting on silver linings in Congress' 'lame duck' session

The final weeks of the current U.S. Congress are shaping up to be a quiet period for the cryptocurrency industry. Industry insiders and lobbyists expect little to no progress on major digital asset legislation, as the 'lame duck' session is consumed by the confirmation of new regulators and the finalization of spending bills.

The 'lame duck' session, which occurs between the November elections and the start of the new Congress in January, is typically a time for last-minute legislative activity. However, experts say the crypto industry's long period in the spotlight this year has exhausted its political capital.

Cody Carbone, CEO of the Digital Chamber, told CoinDesk he sees 'little hope' for substantive legislative progress. He noted that other efforts are competing for limited time and that there is a general 'moving on' from lawmakers regarding the Digital Asset Market Clarity Act.

Regulatory Confirmations

The primary focus for the lame duck session is the confirmation of new leadership at the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). President Donald Trump has nominated two people to join the SEC and two for the CFTC, including one Democrat for each agency.

The Senate Banking Committee has scheduled a hearing to consider the SEC nominees, while the Senate Agriculture Committee indicated it will schedule a CFTC confirmation hearing soon. Financial policy analyst Jaret Seiberg wrote in a client note that these nominations are 'likely to be confirmed before Congress adjourns for the year.'

Both agencies will remain under Republican control for the duration of Trump's term, which ends in 2029. This control allows them to continue executing the administration's agenda for crypto, prediction markets, and artificial intelligence, regardless of Democratic oversight.

Narrower Legislative Possibilities

While major legislation is unlikely, a few narrower measures may receive attention. One live bill touches on cryptocurrency in a narrow sense by addressing the permitting process for data centers, which are used for bitcoin mining.

The bipartisan legislation would speed up the federal permitting process for data centers and other infrastructure but would require them to pay full costs for energy usage. Some miners support the bill for the sake of permitting speed and federal certainty, while others are concerned about paying above-cost energy prices.

Other potential areas of focus include novel tax treatment for cryptocurrency, a streamlined move to fill the gap in crypto spot market authority with new CFTC powers, and the return of bipartisan agreements from the Clarity Act talks, such as on illicit-finance protections and stablecoin yield.

Future Outlook

The industry believes that the most important regulations for crypto in America are being written at the SEC and CFTC right now. The real opportunity for new legislation may come with the arrival of the next Congress, where nearly one in four members will be new.

Many of these new members are about to receive their first briefings on cryptocurrency. The Blockchain Association's Kristin Smith said, 'We want it to come from us,' indicating the industry's desire to shape the understanding of these new lawmakers.

Ryan Eagan of the Crypto Council for Innovation noted that the lame duck is always the most chaotic part of the congressional calendar. While he said one can never rule anything out explicitly, the industry is not expecting a major breakthrough in the coming weeks.