TD Cowen, an investment bank, has raised alarms that the upcoming midterm elections in November may influence support for the Responsible Financial Innovation Act, aimed at structuring the digital asset market. They suggest potential conflicts of interest could deter some Senate Democrats from backing the bill, which was initially known as the CLARITY Act when approved by the House in July.

TD Cowen indicated that the bill might not pass until 2027, with a full implementation possibly in 2029, citing the unpredictable nature of election outcomes.

Earlier drafts of the bill proposed by the Senate Agriculture Committee included provisions to prevent government officials, including former President Donald Trump and his family, from holding cryptocurrencies or directly engaging with the sector.

ne leading to potential shifts in Congressional power dynamics.

“Time favors enactment as the problems disappear if the bill passes in 2027 and takes effect in 2029. Crypto would need to accept that the presidential election could impact the final rules, and Democrats would need to accept that the conflict provision will not apply to Trump.”

• TD Cowen report

Markups for the Responsible Financial Innovation Act are anticipated this month before being taken into consideration by the full Senate chamber. If approved, it would grant the U.S. Commodity Futures Trading Commission greater regulatory power over digital assets.