2026: An Element of the Story in US Crypto Regulation and Market Evolution

Entering 2026, the regulatory landscape in America for digital assets is becoming clearer than in previous years. The main question is no longer whether policymakers should act, but how they will do so effectively. The story element here is the growing bipartisan alignment on the core components of a comprehensive crypto market structure bill. Amid political hurdles and unresolved issues, the US is definitely moving toward more regulated and competitive digital asset markets.

Bipartisan Consensus Is Forming: Story Element in the New Regulatory Framework

In the past month of 2025, engagement with Congress and the Executive Branch has shown significant convergence on key elements of crypto regulation. The story element is no longer about whether regulation is needed, but about the technical details of how to implement it.

Remaining obstacles are primarily political: regulatory conflicts over stablecoin rewards, pending confirmations of agency leadership, and complex interests surrounding certain crypto ventures. However, the direction is becoming clear—the US is ready to create a safer and more transparent path for crypto businesses to operate without the ongoing threat of retroactive enforcement.

The regulatory vision for 2026 should be based on two foundations: First, developing clear and safe pathways for legitimate crypto entrepreneurs. Second, restoring global trading activity to the US and changing the reality that 80% of crypto market volume still occurs outside the country.

Market vs Security: Story Element in the New Classification System

One of the most strategic developments is the growing alignment toward a more sophisticated approach to market structure. The story element here is based on simplified logic: assets that are not traditional securities should be given a commodity classification when traded on secondary markets, even if fundraising remains under SEC jurisdiction.

This reflects how modern markets actually operate. The SEC has long regulated disclosure and conduct during fundraising, while the CFTC focuses on trading integrity and derivatives oversight. Applying both frameworks to digital assets is clearer and more efficient than trying to stretch securities law over the entire token lifecycle.

This approach does not mean deregulation. Where projects have significant centralized control or ongoing active governance roles, disclosure requirements remain. The real challenge is ensuring that rules are aligned with the realities of early-stage startups, not imposing IPO-level compliance burdens on projects lacking resources.

If executed correctly, this model will provide clarity while allowing non-security tokens to be traded on regulated venues designed for price discovery and transparency—an essential condition for building legitimate onshore exchanges and attracting institutional participation.

Story Element in Market Makers and Liquidity Providers

The second and increasingly critical dimension is reframing crypto regulation around US competitiveness. Currently, over 80% of global crypto trading volume occurs outside America, a dynamic almost unprecedented in other major financial markets.

Policymakers recognize that excessively complex, strict, or ambiguous rules do not eliminate risk—they just export activity. In 2026, competition is likely to become central to regulatory discussions.

Effective regulation should protect consumers while making the US attractive for capital formation and trading. This means placing greater emphasis on technology-neutral policies focused on outcomes—fair markets, disclosure, integrity—rather than dictating specific technical architectures.

The critical question is: if the goal is to attract trading volume back to domestic venues, clarity and usability are more important than theoretical purity. Market makers need explicit carveouts or safe harbors for genuine market-making activities. Without this legal certainty, rational liquidity providers will operate where clarity exists—and the country will lose access to healthy markets.

Real-World Impact: Pudgy Penguins and the True Token Economy

The story element is visible in emerging projects demonstrating the potential of well-structured crypto ventures. Pudgy Penguins stands out as one of the strongest NFT-native brands of this cycle, transitioning from speculative digital luxury goods to a multi-vertical consumer IP platform.

Their strategy is revealing: acquire users through mainstream channels—toys, retail partnerships, viral media—and then onboard them into Web3 via games, NFTs, and the PENGU token. The ecosystem has expanded to include phygital products (over $13M in retail sales, over 1 million units sold), gaming experiences (Pudgy Party surpassed 500k downloads in two weeks), and a widely distributed token (airdropped to over 6 million wallets).

While the market currently prices Pudgy at a premium relative to traditional IP peers, sustained success depends on execution across retail expansion, gaming adoption, and deeper token utility. This is a concrete example of how, in a clear regulatory environment, crypto ventures can build sustainable business models beyond pure speculation.

Practical Challenges: What Is Needed for Success

Two unresolved elements will determine whether the US succeeds in this regulatory transition:

Token Classification Standards — Any viable framework must rely on objective, observable criteria tied to how a token actually functions today. Focusing solely on historical issuance mechanisms is risky, as it risks recreating the uncertainty caused by enforcement overhang. A credible classification should allow investors, trading venues, and advisors to assess tokens based on architecture, governance, economic rights, and real-world utility.

Liquidity Provision Safe Harbor — No deep and stable markets exist without professional liquidity providers willing to offer two-sided quotes and take inventory risk. Explicit carveouts for genuine market-making activities would dramatically improve market quality. Without this clarity, regulatory risk will choke onshore participation, resulting in thinner books, wider spreads, and greater volatility—outcomes that oppose regulatory goals.

Toward 2026: The Coming Regulatory Transformation

2026 will be a transition year for US crypto regulation. Progress will likely come through the implementation of widely agreed-upon ideas. Even incremental advances in market structure, token classification, and liquidity processing represent significant steps forward.

The story element is clear: the US is definitely moving toward regulated, competitive, and institutionally accessible crypto markets. The remaining question is how quickly the transition from bipartisan consensus to actual implementation will occur—and whether the technical details will be executed with the precision needed to lay a foundation for long-term market integrity.

Success will depend not only on policymakers but also on industry participants ready to operate responsibly within the new framework. For advisors and investors, 2026 will be a pivotal year when crypto becomes more integrated into the mainstream financial landscape.