The United States is on the cusp of what may be its most propitious policy environment for the cryptocurrency industry since its inception. A potential second term for President Donald Trump is anticipated to accelerate deregulation across financial markets and draw digital assets closer to the core of the U.S. financial system. This comprehensive outlook comes from a new report by TD Cowen’s Washington Research Group, which was shared with Bitcoin Magazine. The report pinpoints 2026 as a rare convergence of aligned regulators, political will, and market momentum, creating a critical, albeit brief, window in which crypto firms could solidify lasting policy gains.

However, these prospective gains are not guaranteed to endure. TD Cowen repeatedly cautioned in its report that many initiatives could face revision or reversal by a future Democratic administration if they are not definitively finalized, robustly implemented, and legally defended before the next presidential transition in 2029. Rather than forecasting sweeping crypto legislation, the firm expects change to materialize through more targeted mechanisms, such as exemptions, specific agency guidance, the issuance of new charters, and precise market-structure adjustments. This approach signifies a regulatory strategy that prioritizes speed and durability over broad ambition.

TD Cowen characterizes the broader regulatory environment as initiating a “golden age of deregulation” across financial services, housing, and the emerging crypto sector. The report states that President Trump has moved with greater celerity than prior presidents to assert control over financial regulators, installing leadership teams who are explicitly committed to lighter, more tailored oversight and a permissive stance toward digital assets and tokenization. Notably, the White House, Treasury Department, and market regulators are described as unusually aligned on the conviction that regulation should accommodate innovation rather than impose constraints upon it.

The timeliness of these policy shifts is paramount for any substantial progress in the crypto sector. This alignment among key governmental bodies underpins many of the crypto initiatives expected to unfold in 2026. Yet, TD Cowen sternly cautions that new rules must be finalized within this year to effectively withstand potential court challenges and become sufficiently entrenched, making them significantly harder to unwind should political control shift after the 2028 election.

At the Securities and Exchange Commission (SEC), the report suggests that Chair Paul Atkins is preparing to utilize exemptive relief to broaden crypto-related activity within U.S. securities markets. The SEC is anticipated to issue so-called “innovation exemptions” as early as the first quarter of 2026. These exemptions would enable brokerages and crypto platforms to offer tokenized stocks and bonds that settle instantly and operate outside certain elements of the National Market System. TD Cowen expects early tokenized equity trading to concentrate on retail investors and provide benefits to online brokerages and crypto-native exchanges. While the SEC is likely to loosen best-price obligations specifically for these new products, the core Order Protection Rule for traditional markets is expected to remain intact. The firm assigns this initiative a moderate sustainability rating, implying that a future Democratic SEC would likely layer on additional investor protections rather than dismantle tokenization altogether. Furthermore, the SEC is expected to clarify how staking-as-a-service programs are treated under securities law. Fixed-return staking products would likely be classified as securities, while variable, profit-sharing arrangements could be treated as fee-for-service activities. TD Cowen observes a growing bipartisan agreement on the necessity for a clearer framework for staking, even if the specific details remain a subject of ongoing contention.

On the banking side, regulators have begun to cautiously open the perimeter to crypto firms while maintaining formal limits on traditional deposit-taking and lending. In December 2025, the Office of the Comptroller of the Currency (OCC) granted national trust charters to several prominent crypto firms, including Circle, Ripple, and Paxos. This crucial development allows these companies to hold stablecoin reserves under a single federal regulatory regime, thereby circumventing the complexities of state-by-state oversight. TD Cowen argues that these charters deepen the integration between traditional banking and digital assets and could eventually pave the way for banks to issue and manage stablecoins themselves. While Democrats could tighten supervision if they regain power, the firm views outright revocation of these charters as unlikely. The Federal Reserve is also moving to accommodate crypto-linked payments activity. The report highlights a proposal for “Payment Master Accounts” that would grant eligible crypto and payments firms limited, non-interest-bearing access to the Fed’s established payment rails. These accounts would process transactions without providing features such as overdrafts or access to the discount window. TD Cowen views this move as durable once implemented, despite potential concerns from traditional banks regarding increased competition.

On Capitol Hill, the centerpiece of the crypto legislative agenda is a proposed market-structure bill known as the CLARITY Act. TD Cowen remains skeptical that Congress will deliver a second major legislative win after the passage of stablecoin legislation, but it concedes that a narrow, targeted compromise remains possible on investor protection, custody standards, and anti–money laundering (AML) rules. The most significant obstacle is the Democratic insistence on ethics provisions that would specifically bar senior government officials and their families from owning crypto exchanges, issuing tokens, or operating stablecoins—language widely seen as aimed at President Trump’s ties to World Liberty Financial. TD Cowen warns there is no easy compromise on this contentious issue, significantly elevating the risk that market-structure legislation could be delayed until 2027 or collapse entirely.

Beyond the realms of trading and direct regulation, the report points to an accelerating interest in the tokenization of real-world records. This includes critical documents such as property deeds, mortgage documentation, and comprehensive medical files. These projects are framed primarily as efficiency upgrades rather than contentious deregulatory flashpoints, a characteristic that is expected to contribute significantly to their political durability across different administrations.