Clarity Act Still Faces Push From Banks As Yield Fight Stalls Deal

What Happened

Senate negotiators introduced draft language that would restrict interest or yield payments tied to stablecoin holdings. Banks support tighter limits. They argue that yield-bearing stablecoins could function like unregulated bank deposits.

Market Context

The White House pushed for a breakthrough on stablecoin yield negotiations for the CLARITY Act this weekend. It did not happen. Instead, fresh reports from sources close to the talks suggest the crypto market structure bill remains far from a final deal.

That disagreement now threatens the broader market structure framework.

Why It Matters

Banking representatives and crypto lobbyists are still divided over whether stablecoins can generate yield for users. That dispute continues to block progress in the Senate.

The CLARITY Act Nowhere Near a Resolution?

Details

According to Eleanor Terrett, banking-side sources described the negotiations bluntly. Draft language exists, but the sides are “not close.”

Other banking trade groups pushed back on claims the talks are collapsing, saying discussions are ongoing and input on draft text continues.

The split narrative reflects how fragile the negotiations have become.

Where the Bill Stands Now

The House passed the CLARITY Act in July 2025 with bipartisan support. The bill aims to define when digital assets fall under SEC oversight and when they qualify as commodities under the CFTC. It also establishes registration rules for exchanges, brokers, and custodians.

After clearing the House, the bill moved to the Senate Banking Committee. There, it stalled.

No markup has been completed. No floor vote is scheduled.

The legislation remains stuck in committee.

Stablecoin Yield Is the Flashpoint

Originally, the bill focused on regulatory clarity between the SEC and CFTC. But in early 2026, the fight shifted to stablecoins.

Crypto firms strongly oppose that view. Coinbase CEO Brian Armstrong has publicly argued that stablecoins can generate yield responsibly and that banning rewards would harm innovation.

White House Pressure, But No Breakthrough

The White House has convened meetings between banks and crypto firms in recent weeks. Officials reportedly wanted a deal on yield before March.

However, sources say key language remains unresolved.

Bank trade groups such as the American Bankers Association and the Independent Community Bankers of America have reportedly rejected claims that negotiations are collapsing. Still, there is no finalized text.

What Is Still Unresolved

Four core issues remain:

Whether stablecoin rewards count as prohibited interest

How sharply to limit exchange incentives

The final boundary between SEC and CFTC authority

The scope of obligations for DeFi developers