U.S. markets may open tomorrow with more questions than answers about the much-anticipated CLARITY Act. This 278-page digital-asset bill is meant to clear up who regulates cryptocurrencies, but it has instead ignited a public feud.
A recent White House meeting, on Tuesday, February 10, between banks and crypto executives ended with no agreement, as stablecoin yield programs remain a toxic sticking point. In short, Washington’s attempt to draw a bright line in crypto law has instead cast a murkier shadow.
White House Crypto Summit Stalls Over Stablecoin Yields
At the White House closed-door sessions on February 2 and 10, crypto lobbyists and big banks came face-to-face, yet emerged still at odds. The core dispute is stablecoin rewards. Crypto firms insist yield programs are vital to attract customers, while bankers warn that high crypto yields could drain deposits from insured banks. The meeting was meant to resolve this impasse, but by all accounts, it failed.
A Reuters story about the meeting noted that each side left, deeming it “constructive,” but “fundamental disagreements” remain.
Notwithstanding this, with House Democrats still hashing things out and two Senate versions floating (one from Finance, one from Agriculture), the deadline keeps slipping. Lawmakers say “everyone is at the table,” but for now, U.S. crypto regulation stays in limbo.
$6 Trillion Stablecoin Yield Battle: Crypto Rewards vs. Banks
Stablecoin yields have become the flashpoint of this bill. According to our earlier report here, Coinbase highlights that Circle’s USDC holders currently earn 3.5% on stablecoin balances (vs. under 1% at most big banks). Wall Street fears that if Americans flock to crypto for yield, banks could lose trillions.
Bank of America CEO Brian Moynihan warned investors that up to $6 trillion could migrate from bank deposits into yield-bearing stablecoins if rewards continue. The proposed CLARITY Act would effectively ban banks from offering competing crypto yields, a provision backed by regulators but denounced by crypto CEOs.
This explainer has sparked a grassroots outcry. A campaign called StandWithCrypto reports 250,000 messages sent to Congress urging lawmakers not to kill stablecoin rewards.
Coinbase’s policy head, Faryar Shirzad, told CNBC that consumers “deserve” these rates and that banning them would hurt everyday savers. In other words, crypto firms say yield rules are about consumer choice and competition, while banks cast them as a systemic risk. This tug-of-war over dollars looms large as markets open.
Coinbase Withdraws CLARITY Act Support: Armstrong’s Key Flaws
Just last summer, even Coinbase was cheering crypto legislation. In a House press release from July 2025, Coinbase said, “lawmakers from both sides agree: it’s time to protect consumers…vote YES” on new crypto bills. But after reviewing the Senate draft in January, Armstrong abruptly flipped.
He listed the bill’s flaws in a public post: “a de facto ban on tokenized equities,” expansive government access to financial data, and the stablecoin issue. “After reviewing the Senate Banking draft text over the last 48 hrs, Coinbase unfortunately can’t support the bill as written,” he tweeted.
Armstrong insists he’s not blowing up the process, just voicing customer concerns. In interviews from Davos, he stressed he still expects crypto legislation to pass and called the negotiation “a win-win scenario for everyone”. His rallying cry was fairness: “Banks should have to play on a level playing field,” he told CNBC, arguing banks must raise their own deposit rates rather than kneecap crypto yields.
For now, Coinbase stands as a cautionary tale of how fragile crypto consensus can be – one misstep and industry support can evaporate.
Crypto Founders Divided: CLARITY Act Clarity or Betrayal?
It’s not just exchanges. Crypto’s own founders are divided. Ripple CEO Brad Garlinghouse praised the CLARITY Act framework, saying that crypto’s success hinges on resolving the current issues. Meanwhile, Charles Hoskinson was scathing: he likened crypto pioneers who back the bill (specifically Ripplers) to Judas for “handing the revolution to 15 banks”. In a fiery live stream, Hoskinson argued every new token would become a security by default, and regulators would have ultimate veto power over projects, undoing the industry’s hard-won independence.
These mixed messages have had a real impact. Data from Santiment shows that Cardano’s community went briefly bullish around Hoskinson’s interview, but its price fell about 7% the following day. In short, the dial on Wall Street may be “bipartisan compromise,” but the dial on X (formerly Twitter) ranges from utopian (“we get clear rules!”) to dystopian (“government spy-state crypto”).
Enterprise Support for CLARITY Act: Hedera, a16z, and Google
Some enterprise players are optimists. Hedera’s governing council (which includes Google, IBM, and other giants) formally endorsed the bill. Nilmini Rubin of Hedera said the council supported the Act and thanked Congress for its bipartisan efforts. This stance reflects a belief that clear rules bring investment. Indeed, surveys suggest over 80% of banks are already experimenting with blockchain and would welcome legal certainty.
Other industry voices reinforce this. According to the press release by the U.S. House Committee on Financial Services, Chairman French Hill, a coalition of trading firms, asset managers, and associations has urged passage of the CLARITY Act to “keep innovation under U.S. regulatory leadership,” highlighting that Europe and Asia are moving faster on crypto rules. Even a16z crypto’s Chris Dixon cheered the bills as protecting consumers and “ensuring crypto stays in the U.S.”.
In a nutshell, a camp of crypto insiders believes the CLARITY Act will codify American leadership and prevent innovation flight overseas, provided their concerns get addressed in time.
Bitcoin Volatility Amid CLARITY Act Uncertainty: Markets on Edge
Unsurprisingly, crypto markets have been choppy. Bitcoin briefly peaked at over $90,000 after the January CLARITY Act “blow-up” news. Ether and other major tokens have also retreated amid the uncertainty. By contrast, tokens backed by regulatory clarity, e.g., Ripple’s XRP, saw gains in recent months. Traders cite a “regulatory premium” in XRP, and demand remains high for projects seen as compliant.
Overall, sentiment data shows the industry is on edge. A delay or failure to resolve these issues could spook markets further, while any sign of compromise (especially on stablecoins) might spark a rally.
For now, every tweet from a CEO or policymaker is dissected by investors. With U.S. markets open this week, watch crypto equities and Bitcoin closely. They’re essentially another referendum on the CLARITY Act’s fate.
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.
