A senior policy executive at crypto-focused investment firm Paradigm warned this week that even if Congress passes a new crypto law quickly, translating it into enforceable regulations will be a years‑long process. What happened - On January 13, 2026, U.S. senators circulated a draft bill intended to clarify which tokens qualify as securities or commodities and to assign regulatory responsibility for spot crypto trading. The draft shifts much of the oversight for spot markets to the Commodity Futures Trading Commission (CFTC) and includes provisions aimed at restricting how stablecoins can be used to pay interest, among other changes. - Justin Slaughter, Paradigm’s vice president for regulatory affairs, said the statute itself is only the beginning. He estimates the bill would force regulators to draft roughly 45 distinct, detailed rules — each requiring proposals, public comment periods, revisions and finalization — before the law’s aims could be fully implemented. Why it could take years - Slaughter compared the likely timeline to the post‑Dodd‑Frank rulemaking process, where many required rules took between three and eight years to finalize. That history illustrates how even fast legislative action can be followed by lengthy regulatory work. - Rulemaking can be slowed by legal challenges, agency staffing and resource limits, political changes, and disputes over interpretation. Slaughter warned parts of the process could span two presidential terms, leaving the industry operating under a patchwork of new guidance and legacy rules for an extended period. Industry reaction and practical impact - Exchanges, banks and stablecoin issuers are already building compliance plans. Some in the industry favor the draft’s tilt toward CFTC oversight for spot markets, seeing it as potentially more aligned with current trading practices. - Others warn the long rulemaking horizon will create sustained regulatory uncertainty that could complicate product launches and compliance efforts. - Key bottlenecks are likely to include jurisdictional fights between agencies, debates over how decentralized finance (DeFi) fits into existing law, and negotiations over ethics and governance provisions — areas Slaughter noted are missing or underdeveloped in the draft (including quorum rules for commissions), which could be dealbreakers for some lawmakers. What regulators are already doing - Both the Securities and Exchange Commission (SEC) and the CFTC have stepped up crypto work. The SEC has signaled plans to update securities rules to better address tokenized instruments, while the CFTC is preparing market‑structure and custody guidance tied to its expanding role. Those agency efforts will influence the technical contours of any final rule set, regardless of the statute’s exact language. Bottom line Passing a statutory framework is only step one. The practical effect on markets hinges on dozens of technical rules that regulators must write — a process that, history and officials warn, could take years and create long stretches of uncertainty for the crypto industry. Featured image: Unsplash. Chart: TradingView. Read more AI-generated news on: undefined/news

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