Crypto Bill Markup Advances as Senator Marshall Drops Critical Swipe Fee Provision

In a pivotal development for cryptocurrency regulation, Senator Roger Marshall has reportedly agreed to withdraw a contentious amendment targeting credit card swipe fees from a major digital asset market structure bill, potentially clearing a significant hurdle for bipartisan advancement as the Senate Agriculture Committee prepares for its rescheduled markup session on Tuesday, February 3, 2025.

Crypto Bill Markup Proceeds Without Swipe Fee Amendment

Republican Senator Roger Marshall filed an amendment last week that would have forced companies to compete on credit card transaction fees, commonly known as swipe fees. However, according to a Politico report published Monday citing individuals familiar with the negotiations, Marshall has privately agreed not to push for the provision’s inclusion during the upcoming committee markup. This decision follows concerns that the amendment could have jeopardized the entire bill’s progress. The Senate Agriculture Committee initially planned to debate and amend the legislation, a process known as markup, on Thursday but postponed it due to a massive winter storm affecting much of the United States.

The core legislation, officially titled the Digital Asset Market Structure Bill, aims to establish a comprehensive regulatory framework for the cryptocurrency sector. It specifically delineates roles for financial regulators like the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). Consequently, the bill’s passage represents a critical step toward providing legal clarity for an industry that has long operated in a regulatory gray area. Deliberations have faced multiple delays as both the Senate Agriculture and Banking Committees work to reschedule markups and build the necessary bipartisan consensus.

Political Dynamics and White House Involvement

The Politico report indicates that White House officials actively engaged in deliberations surrounding the scheduled markup. Sources suggested that Marshall’s swipe fee amendment was viewed as a potential deal-breaker that could have stalled the bill’s movement out of committee. This high-level involvement underscores the administration’s interest in advancing cryptocurrency legislation. The amendment itself had garnered support from Democratic Senators Dick Durbin and Peter Welch, creating an unusual cross-aisle alliance on the specific issue of payment network fees.

However, the provision also faced opposition from some Republicans wary of pitting the powerful financial services sector against large retail corporations. This internal GOP divide, combined with external pressure, likely influenced Marshall’s decision to stand down. The legislative maneuvering occurs against a fraught political backdrop, including the rising risk of a partial government shutdown and both parties seeking policy victories ahead of the midterm elections. Current polling and prediction markets suggest a competitive environment, adding urgency to legislative efforts.

Expert Analysis on Legislative Strategy

Legislative analysts note that removing contentious, non-germane amendments is a common strategy to secure broader support for complex financial legislation. “The primary goal of this crypto market structure bill is to create regulatory certainty,” explains a veteran financial policy advisor who requested anonymity to speak freely. “Adding a polarizing issue like interchange fee reform, which is a massive battle in its own right, would have almost certainly doomed the package. Senator Marshall’s tactical retreat is a recognition of political reality and a move to keep the core objective alive.” This approach allows lawmakers to focus on the central tenets of crypto regulation without entangling it in the long-running and separate war over credit card fees.

Broader Implications for Cryptocurrency Regulation

The path forward for the Digital Asset Market Structure Bill remains complex. The Senate Agriculture Committee’s Republican members released their version of the legislation last Wednesday, but it lacked support from the committee’s Democrats. That draft included provisions aimed at protecting cryptocurrency software developers from certain liabilities. Meanwhile, the Senate Banking Committee has yet to set a new date for its own markup session, with reports suggesting it could be delayed until late February or March as the committee shifts focus to other parts of the administration’s agenda.

Both committees have subjected the bill to a series of proposed provisions. Lawmakers have sought to add language addressing ethics, conflicts of interest, and specific restrictions on stablecoins—digital assets typically pegged to traditional currencies like the US dollar. The evolving nature of these discussions highlights the challenge of crafting legislation for a fast-moving technological field. The final bill must balance innovation with consumer protection and financial stability, a task that requires careful negotiation.

The Stablecoin and Developer Protection Debate

Two of the most debated aspects within the bill involve stablecoins and developer liability. Proponents argue that clear rules for stablecoin issuers are essential for maintaining the integrity of the payment system and preventing destabilizing events. Simultaneously, there is strong advocacy from the crypto industry for safe harbors that protect developers of decentralized protocols from being held liable for how third parties use their open-source code. The Agriculture Committee’s draft took a step toward the latter, signaling a priority for some lawmakers. How these elements are reconciled with broader regulatory concerns will be a key focus of the markup process.

Conclusion

The decision by Senator Roger Marshall to withdraw the credit card swipe fee amendment marks a significant moment in the crypto bill markup process, removing a major obstacle to bipartisan cooperation. This move reflects the delicate political balancing act required to pass foundational digital asset legislation. As the Senate Agriculture Committee prepares for its rescheduled session, the focus returns to the core mission of the bill: providing a clear, workable regulatory structure for the cryptocurrency market. The outcome will have profound implications for innovation, investor protection, and the United States’ role in the global digital economy.

FAQs

Q1: What was in Senator Marshall’s dropped amendment?
The amendment would have required companies to compete on credit card “swipe fees,” or interchange fees, which are charges merchants pay to process card transactions. It aimed to inject more competition into the payment network market.

Q2: Why was the swipe fee amendment considered a risk to the crypto bill?
It was a politically contentious issue separate from core cryptocurrency regulation. Including it would have alienated key stakeholders and lawmakers, potentially sinking the entire market structure bill due to lack of support.

Q3: What is the main purpose of the Digital Asset Market Structure Bill?
The bill seeks to establish clear regulatory guidelines for the cryptocurrency industry, defining which agencies oversee different types of digital assets and creating rules for trading platforms, stablecoins, and consumer protections.

Q4: Which Senate committees are handling this legislation?
The Senate Agriculture Committee and the Senate Banking Committee share jurisdiction. The Agriculture Committee oversees the Commodity Futures Trading Commission (CFTC), which would gain significant authority under the bill.

Q5: What happens after the committee markup?
If the bill passes out of committee, it would proceed to the full Senate for debate, amendment, and a vote. It would then need to be reconciled with any version passed by the House of Representatives before going to the President.