The long-awaited Digital Asset Market CLARITY Act (H.R.3633) is stuck in a tense stalemate. As recently discussed here, the billpassed the House 294–134 last July but has stalled in the Senate over a fight on stablecoin yield rules.
On Thursday, February 19, the White House convened its third round of closed-door negotiations, bringing in crypto representatives (Coinbase, Ripple) and major banks, but still no compromise was reached on stablecoin interest provisions.
Paul Grewal, Coinbase’s legal chief, described the Thursday meeting as “constructive…cooperative”, but insiders report no agreement. The divide is stark: banking groups argue any yield on stablecoin holdings “resembles deposit-like interest” requiring bank oversight, while crypto firms warn that banning all rewards would “undercut product innovation”. At the February 10 session, bankers even showed up with a “principles” paper demanding a total ban on stablecoin rewards.
Regulators have set a March 1 deadline for a deal, warning that failure to reach terms by then could scuttle the whole bill.
Industry vs. Wall Street: Yield War Heats Up
With the clock ticking, industry CEOs are publicly weighing in. Coinbase CEO Brian Armstrong, who once quipped the industry would “rather have no bill than a bad bill,” has since softened his tone. In recent comments, he stressed the need for the “right bill,” criticizing the draft’s “too many giveaways to the traditional financial system,” but said he’s “pretty optimistic” all parties can agree on a final compromise.
Still, key disputes linger. The draft CLARITY Act would split regulatory authority between the SEC and CFTC, a change that crypto firms initially feared would weaken the CFTC’s role.
Distinguished Professor of Law at the University of Arkansas, Carol Goforth, notes this battle is essentially a clash of industries: “two powerful (and wealthy) industries fighting over which set of rules will most benefit themselves,” since banks hate any tool that competes with deposit interest.
Regulators Push Forward: Momentum Builds Toward Deadline
Behind the scenes, progress is uneven but visible. CFTC ChairMichael S. Selig says the CLARITY Act is now “on the cusp” of becoming law. The House margin of 294–134 showed strong bipartisan support, and even the Senate Agriculture Committee has already cleared a related version (12–11).
Treasury Secretary Scott Bessent has publicly urged a spring signing, noting that the 2026 midterms “create urgency”. Even SEC Chair PaulS. Atkins warned that piecemeal rulemaking is not “future-proof” without new law.
In short, the bill’s framework is largely settled, but the last-mile wrangling over stablecoin yield (and related issues like tokenized securities and DeFi oversight) is the final hurdle. Both sides admit some compromise is needed.
Lawmakers Race the Clock: 90% Odds Fuel Optimism
Lawmakers are racing against the clock to define clear crypto rules.
Ripple CEO Brad Garlinghouse told FOXBusiness he sees a 90% chance of the CLARITY Act passing by April 2026.
Investors should watch the fine print, because real changes may be imminent.
Author: Ayanfe Fakunle
The editorial team at #DisruptionBanking has taken all precautions to ensure that no persons or organizations have been adversely affected or offered any sort of financial advice in this article. This article is most definitely not financial advice.
See Also:
CLARITY Act: Washington Promised Certainty, Crypto Got a Civil War | Disruption Banking
