Senator Grassley's Judiciary Panel Could Reshape Crypto Market Structure Bill

The race to pass comprehensive U.S. crypto legislation is heating up, with a critical complication: Senator Chuck Grassley is demanding that his Judiciary Committee get a say in the final bill. This move threatens to complicate an already complex legislative process involving multiple committees, competing party interests, and fundamental disagreements over how to regulate digital assets.

The Senate Agriculture Committee is now the driving force behind a new draft crypto market structure bill. After the Senate Banking Committee’s attempt to craft similar legislation collapsed under pressure from Democrats, resistant Republicans, and the White House, lawmakers are trying a fresh approach through Agriculture—a committee historically known for bipartisan cooperation. However, that goodwill may be tested if the bill advances without Democratic support.

Republican-Led Agriculture Committee Takes Charge After Banking Effort Stalls

Industry insiders are preparing for what could become a partisan Republican effort, according to people familiar with ongoing negotiations. The Agriculture Committee has scheduled a markup session and vote for late January, with draft legislation expected to emerge mid-week. Committee Chairman John Boozman praised his partnership with Democratic Senator Cory Booker, signaling the committee’s initial commitment to bipartisan work.

The agriculture approach divides crypto regulation differently than the banking version. The Agriculture Committee focuses on commodities oversight—where crypto naturally falls—while the Banking Committee handled securities regulation. Since digital assets straddle both worlds, approval from both committees is technically required. However, the agriculture version sidesteps some of the thorniest issues that derailed banking negotiations, including stablecoin yield regulations and illicit finance prevention.

Despite Agriculture’s traditionally collaborative reputation, Democrats have signaled significant concerns. The party is pursuing demands on consumer protection standards, ethics safeguards, and insisting the White House fill open regulatory commission seats at agencies like the Commodity Futures Trading Commission. Without Democratic buy-in, advancing the bill becomes mathematically difficult: Senate rules typically require at least seven Democratic votes to pass legislation.

The Multi-Committee Puzzle: Why Senator Grassley’s Judiciary Committee Matters

Here lies the complication. Senator Grassley, who chairs the Judiciary Committee, has made clear that his panel must weigh in on one key component: liability protections for crypto developers. He argues this issue falls squarely within Judiciary’s jurisdiction and shouldn’t be buried in a market structure bill.

This jurisdictional claim, while procedurally reasonable, adds another layer to an already Byzantine legislative process. Developers and crypto platforms want broad liability shields to shield innovation; consumer advocates worry such protections could enable bad actors. Grassley’s insistence that Judiciary approve this language means the bill can’t simply pass Agriculture and Banking—it needs Judiciary sign-off too.

Additionally, Senate Banking Committee Chairman Tim Scott has separately proposed that ethics-related anti-corruption provisions—another Democratic priority—belong in the Senate Ethics Committee rather than the core crypto bill. This further fragments the legislative authority needed to pass comprehensive regulation.

Developer Protections and Stablecoin Yields: Where Disagreements Run Deep

The developer liability issue isn’t merely procedural—it’s ideological. Democrats worry that overly broad protections could let bad actors hide behind technical neutrality arguments. Republicans, along with crypto advocates, see developer protections as essential to fostering innovation in blockchain technology.

Stablecoin yields present another sticking point. These interest-bearing tokens attracted regulatory scrutiny, and Democrats are particularly sensitive to consumer protection concerns. The agriculture bill deliberately excludes this topic to avoid the same impasse that broke Banking Committee negotiations, but unresolved issues have a habit of resurfacing.

White House Crypto Adviser Patrick Witt signaled confidence that legislation will ultimately pass, tweeting that approval is a question of “when, not if.” He emphasized that a “multi-trillion-dollar industry” cannot operate indefinitely without regulatory clarity. Chair Paul Atkins of the SEC echoed this sentiment, suggesting the timing is right to expand crypto access within 401(k) retirement plans—but only with appropriate guardrails.

Timeline Tightens: What Happens Next in the Crypto Legislation Process

The Agriculture Committee has given itself a narrow window to resolve differences before its scheduled hearing. Even if the bill clears both Agriculture and Banking committees, it faces additional hurdles in Judiciary over developer protections, plus potential Ethics Committee involvement.

Industry observers also point to dozens of remaining policy questions: How should decentralized finance platforms operate? What enforcement powers should regulators have? How do existing securities laws apply to tokens and digital assets?

The original Digital Asset Market Clarity Act, in a far different form, already passed the House of Representatives last year. This Senate version represents a new attempt to harmonize federal jurisdiction and regulatory authority—but Senator Grassley’s demands suggest unity is far from assured. The outcome depends on whether Republicans and Democrats can find common ground on developer liability, consumer protections, and the proper committee jurisdictions to oversee each aspect of crypto oversight.