A comprehensive crypto market structure bill, dubbed FIT21, is poised for a House floor vote by month's end, but its chances of becoming law this Congress are slim, according to TD Cowen. Despite this, the bill lays crucial groundwork for future regulation.

FIT21 takes a holistic approach to regulating crypto and shifts more responsibility to the Commodity Futures Trading Commission. While it's unlikely to pass the Senate, the bill's passage in the House will put members on the record and shift focus to the Senate to act.

TD Cowen notes that the bill's details are less important than its role in setting up future regulation. Democrats are focused on investor protections, which aren't the bill's priority. Still, the vote will reveal how lawmakers view critical issues like anti-money laundering and investor protections.

House Financial Services Committee Chair Patrick McHenry calls FIT21 a bipartisan effort to provide clarity in digital asset markets. While McHenry is retiring, his push for crypto regulation may bear fruit in the future.

A wild card is former President Donald Trump's recent pro-crypto stance, which may impact future regulation if he wins the presidency. Trump has promised to retain cryptocurrency businesses in the US, but his approach may polarize crypto oversight and complicate bipartisan compromise.

In any case, FIT21 sets the stage for renewed efforts to enact crypto market structure legislation in 2025/26, making it a critical building block for future regulation.