Crypto's credit card dilemma

Politico

02-06-2025

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Quick Fix
A fierce lobbying war in Washington is threatening to jeopardize one of President Donald Trump's top financial policy priorities on Capitol Hill.
After months of chaotic negotiations in the Senate, landmark cryptocurrency legislation that would create a regulatory framework for stablecoins finally appears to have the votes to clear the upper chamber, with a vote on final passage expected in the coming days. But now, a contentious battle over credit card swipe fees could blow the effort up.
Senate Majority Leader John Thune's pledge to return the chamber to 'regular order' with open amendment processes has raised the possibility of a vote on divisive legislation that would crack down on credit card swipe fees. Supporters are eyeing the stablecoin bill as a vehicle to force an amendment vote on the so-called Credit Card Competition Act, which seeks to force payment networks to compete on swipe fees.
The credit card measure, long championed by Sens. Dick Durbin (D-Ill.) and Roger Marshall (R-Kan.), is such a fraught policy battle because it pits two powerful lobbying conglomerates — the financial sector and major retailers — against one another.
Crypto supporters, who are within spitting distance of their biggest win ever in the Senate, are scrambling to prevent the credit card provision from derailing their stablecoin bill. It is highly unclear how a vote on the Durbin-Marshall provision would go: Most senators haven't taken a position on the matter (and they likely aren't eager to). But the fear for pro-crypto lawmakers is that it could garner enough support to be adopted as an amendment with backing from most Democrats and some Republicans — and then tank the underlying stablecoin bill by peeling off GOP senators who oppose the credit card amendment.
'It's a deal-killer,' said Sen. Thom Tillis (R-N.C.), who supports the stablecoin bill but said he will 'do everything [he] can to kill the bill' if the credit card legislation is attached. 'If it goes in it, the value out of the stablecoin components would not outweigh the damage done by CCCA.'
The issue highlights the challenge Thune faces in delivering on his promise to hold open amendment processes.
It is uncertain if the swipe fee crackdown will ultimately get a vote. The issue is likely to come to a head this week as GOP leaders look to move the bill toward final passage. Further procedural votes could come this week, but the timing of a vote on final passage will depend on whether they can get a deal on amendments.
The credit card provision is the biggest outstanding question. Durbin and Marshall have been pushing for years to force a vote or attach it to must-pass legislation, and they have failed every time.
Marshall has filed his bill as an amendment to the stablecoin legislation. But asked by MM prior to Congress' Memorial Day recess whether he will seek to force a vote on the measure, he said he has 'not decided what to do.'
'We have all our options open,' he said.
Many lawmakers likely aren't eager to take a position on a matter that would alienate a powerful interest. Both Wall Street (which opposes the bill) and the retail and restaurant sectors (which support it) represent stakeholders in members' states and are major fundraising sources.
'I love them all,' said Sen. Kevin Cramer (R-N.D.), who says he is undecided on the credit card legislation.
'I have some sympathy for that issue, but I also think it would kill the bill if it were passed,' he added. 'A lot of people that would be sympathetic to the cause would vote `No' for the sake of the larger bill. And because of that, I don't think the vote really helps do anything, including identify 'Yes' votes.'
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Driving the Week
MONDAY … Council of Economic Advisers Vice Chair Pierre Yared speaks at a Business Council for International Understanding roundtable at noon … Federal Reserve Chair Jerome Powell kicks off the board's International Finance Division 75th Anniversary Conference at 1 p.m. …
TUESDAY … Senate Finance votes on Bill Long's nomination to serve as IRS commissioner at 9:30 a.m. The committee holds a nominations hearing on picks including Brian Morrissey Jr. to be general counsel at Treasury at 10:30 a.m. … The U.S. Chamber of Commerce kicks off its Capital Markets Summit at 9:35 a.m., with speakers including Acting Comptroller of the Currency Rodney Hood, NASDAQ President Nelson Griggs, SEC Commissioner Mark Uyeda, acting FDIC Chair Travis Hill, Sen. Mike Rounds, Rep. Bill Foster, House Financial Services Chair French Hill and Deputy Treasury Secretary Michael Faulkender. The Brookings Institution holds a discussion on the earned income tax credit at 10 a.m. … The Council on Foreign Relations holds a discussion on the U.S. economic outlook and monetary policy at 1 p.m. … SEC Chair Paul Atkins testifies before Senate Appropriations at 2:30 p.m. …
WEDNESDAY … Rep. David Schweikert speaks at The Hill's 'Invest in America Summit' at 9:05 a.m. … SBA Administrator Kelly Loeffler testifies before House Small Business at 10 a.m. … House Financial Services holds a hearing on the future of digital assets at 10 a.m. … OMB Director Russell Vought testifies before House Appropriations at 2 p.m. …
THURSDAY … The SEC's Investment Management Division hosts a conference on 'Emerging Trends in Asset Management' with speakers including Commissioner Hester Peirce beginning at 9 a.m. … The SEC meets at 10 a.m. … House Small Business holds a hearing on 'How Private Equity Empowers Main Street' at 10 a.m. … House Financial Services holds a hearing on data privacy at 10 a.m. … Fed Governor Adriana Kugler speaks at the Economic Club of New York at noon.. The Urban Institute holds a virtual discussion on 'rent reporting as a pathway to credit building' at 12:30 p.m. … The Peterson Institute for International Economics holds a virtual discussion on industrial policy for Asia and the Pacific at 5 p.m. …
FRIDAY … The Labor Department will release the May jobs report at 8:30 a.m.
ICYMI: The Conversation kicked off with Dr. Oz
In the premiere episode of The Conversation, Dasha Burns sat down with Dr. Mehmet Oz — now leading the Centers for Medicare and Medicaid Services — for a candid talk on drug prices, potential Medicaid cuts and why he's getting early morning calls from President Donald Trump. Plus, POLITICO's Jonathan Martin dished on the Ohio governor's race (featuring Elon Musk, Vivek Ramaswamy and former Ohio State football coach Jim Tressel), and Kyle Cheney unpacked Trump's legal battle over 'Liberation Day' tariffs.
Watch the full episode on YouTube. And don't miss a moment — subscribe now on Apple Podcasts or Spotify to get new episodes when they drop.
Trump regulators prep gift to Wall Street — The Trump administration is gearing up to ease rules imposed on megabanks in response to the 2008 financial crisis, our Michael Stratford reports: 'Trump-appointed regulators are nearing completion of a proposal that would relax rules on how much of a capital cushion the nation's largest banks must have to absorb potential losses and remain solvent during periods of economic stress.
'The plan — being developed jointly by the Federal Reserve, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation — could be released in the coming months, according to two people familiar with the discussions who were granted anonymity to discuss plans that aren't yet public.'
RIP Stanley Fischer — Former Fed Vice Chair Stanley Fischer, who helped steer the central bank from 2014 to 2017 and was an influential economist at MIT, the IMF and the Bank of Israel, died on Saturday at age 81. James R. Hagerty writes for the NYT that Fischer's 'scholarship and genial, consensus-seeking style helped guide global economic policies and defuse financial crises for decades.'
trade
Trump says he'll double steel tariff — Trump said on Friday that he is doubling his tariff on steel to 50 percent to prevent billions of dollars worth of foreign steel from continuing to enter the U.S., Doug Palmer reports.
— Imports plummeted in April as companies adjusted to Trump's sweeping new tariff regime, in an early signal of how his global trade war is unfolding in the U.S. economy, Victoria Guida reported Friday. The goods trade deficit last month was nearly half its size in March, according to an advance estimate from the Commerce Department, driven by a nearly 20 percent drop in imports.
On The Hill
Trump budget — Trump sent the nitty-gritty of his budget proposal to Congress on Friday, fleshing out which programs he wants Republicans to cut deeply — or wipe out entirely — when they vote to fund the government in September, our Jennifer Scholtes writes.
Expanding upon the so-called skinny budget the White House transmitted to Capitol Hill earlier this month, the new documents detail the White House's ambitions for spending cuts across government agencies. They show which accounts the president wants GOP lawmakers to target as Trump seeks non-defense funding cuts of more than 22 percent in the upcoming fiscal year and a flat military budget.
—The SEC asked lawmakers for more than $2.1 billion for the upcoming fiscal year, though the agency cautions that it may not actually need that large of a budget, Declan Harty reports.
Lawmakers to watch in the megabill fight — Our Jordain Carney has a look at the 'Medicaid moderates' — an ideologically diverse bunch of Republicans who are poised to have a major impact on the GOP tax-cut megabill.
Jobs report
Maggie Sklar, a longtime CFTC official who has also worked at the Fed and FDIC, recently joined the U.S. Chamber of Commerce as senior director of public policy and advocacy. — Declan Harty