White House Sets March 1 Deadline for CLARITY Act Decision Amid Stablecoin Yield Standoff
Washington has escalated pressure on stalled cryptocurrency regulatory talks, with the WHITE House imposing a March 1 deadline for resolving the CLARITY Act impasse. Negotiations now hinge on a single contentious issue: whether stablecoin issuers should be permitted to offer yield on idle balances.
Banking lobbyists warn yield-bearing stablecoins could trigger deposit flight from traditional accounts, while crypto firms argue restrictions WOULD stifle innovation. Recent closed-door meetings between regulators, banks, and crypto firms—including Coinbase, Ripple, and Andreessen Horowitz—have narrowed discussions to potentially allowing rewards tied to transactional activity rather than passive holdings.
Draft proposals suggest joint oversight by the SEC, CFTC, and Treasury, with noncompliance penalties reaching $500,000 daily. The deadlock continues to block progress on broader crypto market structure legislation.
