White House fails to broker stablecoin yield compromise
This weekend was supposed to bring a breakthrough. The White House had been pushing hard for some kind of resolution on the stablecoin yield issue that’s been holding up the CLARITY Act. But according to people close to the talks, it didn’t happen. Not even close.
I think what’s happening here is pretty straightforward, but also pretty frustrating. Banking representatives and crypto lobbyists just can’t seem to agree on whether stablecoins should be allowed to generate yield for users. That single disagreement is now blocking the entire market structure bill from moving forward in the Senate.
The current state of negotiations
Eleanor Terrett reported that banking-side sources described the situation bluntly. Yes, there’s draft language floating around. But the sides are “not close” to an agreement. That’s the phrase being used.
What’s interesting is the conflicting narratives emerging. Some banking trade groups are pushing back against claims that talks are collapsing entirely. They say discussions are still ongoing, and input on draft text continues. But the split in messaging itself tells you something about how fragile these negotiations have become.
Let me back up for a second. The House actually passed the CLARITY Act back in July 2025 with bipartisan support. That was a big deal at the time. The bill aims to define when digital assets fall under SEC oversight versus when they qualify as commodities under the CFTC. It also sets up registration rules for exchanges, brokers, and custodians.
But after clearing the House, the bill moved to the Senate Banking Committee. And there it stalled. No markup has been completed. No floor vote is scheduled. The legislation is just stuck.
Why stablecoin yield became the flashpoint
Originally, the bill was mostly about regulatory clarity between the SEC and CFTC. That was the main focus. But in early 2026, the fight shifted to stablecoins.
Senate negotiators introduced draft language that would restrict interest or yield payments tied to stablecoin holdings. Banks support tighter limits on this. Their argument is that yield-bearing stablecoins could function like unregulated bank deposits, which raises all sorts of regulatory concerns.
Crypto firms strongly oppose that view. Coinbase CEO Brian Armstrong has been pretty vocal about this. He’s argued that stablecoins can generate yield responsibly and that banning rewards would harm innovation. That disagreement now threatens the broader market structure framework.
What happens next
The White House has been convening meetings between banks and crypto firms in recent weeks. Officials reportedly wanted a deal on yield before March. But sources say key language remains unresolved.
Bank trade groups like the American Bankers Association and the Independent Community Bankers of America have rejected claims that negotiations are collapsing. Still, there’s no finalized text.
Four core issues remain unresolved, according to people familiar with the talks. I won’t list them all here, but the yield question is central to all of them.
The next key step would be a Senate Banking Committee markup. No date has been announced for that yet. If negotiators can narrow their differences in March, a committee vote could follow later in the month. If talks drag on, the bill risks slipping deeper into election-year politics.
For now, the CLARITY Act remains alive—but stalled. The question isn’t really whether Congress wants crypto rules anymore. It’s whether banks and crypto firms can agree on who controls stablecoin economics. And that’s proving to be a much harder question to answer than anyone expected.
