After years of regulatory limbo, the cryptocurrency industry may finally be approaching clarity. The GENIUS Act, passed in 2025, created a federal framework for payment stablecoins. Market structure legislation is advancing in Congress. And regulators are working to finalize rules that could transform crypto from a regulatory gray zone into a defined asset class.

Goldman Sachs believes this clarity could unlock the next major wave of institutional adoption. The bank's research shows that regulatory uncertainty remains the single biggest barrier keeping institutional money on the sidelines.

The Regulatory Barrier

According to Goldman Sachs survey data, the hesitation among institutional investors is clear:

  • 35% cite regulatory uncertainty as the biggest hurdle to adoption
  • 32% say regulatory clarity would be the top catalyst for investment

"If regulation comes into focus this year—for real, not just ideas about regulation—there will be a lot more excitement in the crypto market."

— Goldman Sachs Research

The numbers suggest a substantial pool of capital is waiting for permission to enter. Bitcoin ETFs have already demonstrated the appetite: since their approval in 2024, bitcoin ETFs have grown to roughly $115 billion in assets, while ether ETFs have surpassed $20 billion.

Key Legislative Developments

The GENIUS Act

The Guiding and Establishing National Innovation for U.S. Stablecoins Act, passed in 2025, established the first comprehensive federal framework for payment stablecoins. The legislation:

  • Creates licensing requirements for stablecoin issuers
  • Establishes reserve and custody standards
  • Defines capital requirements for issuers
  • Sets consumer protection guidelines

Full implementation is targeted for 2026, with regulators required to finalize rules by July 18.

Market Structure Legislation (CLARITY Act)

Perhaps more significantly, Congress is advancing legislation that would clarify which regulator—the SEC or CFTC—has jurisdiction over different crypto assets. White House crypto adviser David Sacks has said the Senate will hold hearings on the bill in January.

"We are closer than ever to passing the landmark crypto market structure legislation that President Trump has called for," Sacks wrote on social media.

The House passed a version of the CLARITY Act in 2025 that would shift much regulatory oversight to the Commodity Futures Trading Commission, a smaller agency generally viewed as more crypto-friendly than the SEC.

State-Level Action

While federal legislation advances, states are also moving. Notable developments include:

  • California: The Digital Financial Assets Law takes effect July 1, 2026, requiring licensing for crypto businesses operating in the state
  • Texas, Arizona, New Hampshire: Exploring Bitcoin reserves for state treasuries and crypto-friendly tax treatment
  • Wyoming: Continues to lead on crypto-specific banking charters and regulatory frameworks

What Institutions Are Waiting For

For institutional investors—pension funds, endowments, insurance companies, and registered investment advisers—crypto allocation decisions involve fiduciary considerations that require regulatory clarity:

  • Asset classification: Is bitcoin a commodity? Is ether a security? The answer determines custody, reporting, and regulatory requirements
  • Custody rules: SEC custody rules for investment advisers create challenges for holding crypto directly
  • Accounting treatment: How crypto assets appear on balance sheets affects corporate adoption
  • Tax treatment: Certainty around tax rules is essential for institutional portfolios

The ETF Success Story

The rapid growth of crypto ETFs demonstrates what's possible when regulatory barriers fall. Bitcoin ETFs attracted over $100 billion in assets within their first year—one of the most successful ETF launches in history.

The ETF structure solved many institutional concerns by providing:

  • Familiar investment vehicle structure
  • Regulated custodians
  • Standard settlement and clearing
  • Tax reporting simplification

Broader regulatory clarity could enable similar solutions across the crypto ecosystem, from tokenized securities to decentralized finance applications.

Investment Implications

If 2026 delivers the regulatory clarity the industry anticipates, several investment themes could benefit:

  • Bitcoin and major cryptocurrencies: Institutional inflows could drive prices higher
  • Crypto exchanges: Coinbase and other compliant platforms would benefit from increased trading volume
  • Financial services: Banks and asset managers expanding crypto offerings
  • Infrastructure: Custodians, market makers, and blockchain analytics providers

Risks Remain

Investors should remain cognizant of risks even as the regulatory picture clarifies:

  • Political uncertainty: Regulatory approaches could shift with future administrations
  • Volatility: Crypto assets remain highly volatile regardless of regulatory status
  • Technology risk: Security vulnerabilities and protocol failures remain concerns
  • Competition: Central bank digital currencies could emerge as alternatives to private crypto

The crypto industry has been waiting years for its "regulatory moment." If 2026 delivers, it could mark the transition from speculation to institutionalization—and potentially reshape the financial landscape in the process.