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Talks at the White House between crypto executives from Coinbase, Ripple, and Circle and representatives from major US banking institutions ended this week without a deal on the CLARITY Act, as the administration drew a March 1 deadline to resolve a core dispute: whether stablecoin yields should be outright banned to protect traditional bank deposits.
The bill was designed to establish a comprehensive federal framework for digital assets. The administration is urging lawmakers and industry stakeholders to reach a consensus by March 1, 2026.
The CLARITY Act, formally known as the Digital Asset Market Clarity Act, seeks to clarify regulatory jurisdiction between agencies such as the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC).
The SEC and CFTC also want to define permissible activities for crypto firms and traditional banks. Though passed by the U.S. House of Representatives in 2025, the bill has stalled in the Senate amid deep policy disagreements.
Key industry executives, banking leaders, and White House officials participated in the discussions, which were described by participants as more productive than earlier rounds but ultimately ended without a binding agreement.
At the heart of the impasse is how the new law would treat stablecoin yields, the interest or rewards paid to holders of dollar-pegged digital tokens.
Banks, supported by major financial institutions, have pushed for a broad prohibition on yield-producing stablecoin products out of concern that high yields could syphon deposits from traditional banks.
Banking representatives presented a set of prohibition principles emphasising strict limits on yield, though they signalled some flexibility on transaction-based rewards, such as cashback or loyalty points tied to stablecoin use.
The crypto industry leaders argue that outright bans or overly restrictive rules would hamper innovation, drive activity offshore, and put US markets at a competitive disadvantage.
Senior executives from firms including Coinbase, Ripple, Circle, and others have advocated for definitions that would allow broader reward structures while maintaining risk-management safeguards.
“Productive session at the White House today, compromise is in the air. Clear, bipartisan momentum remains behind sensible crypto market structure legislation.” Stuart Alderoty, Chief Legal Officer of Ripple, said in public remarks following the talks.
Administration officials have shown the urgency of codifying regulatory clarity for the digital asset market before the March 1 deadline.
Treasury Secretary Scott Bessent stressed the need for market structure and clarity by spring in testimony to lawmakers.
Despite optimism from some quarters that the bill could be enacted by April 2026, partisanship and technical disputes have undercut momentum.
The Senate Banking Committee and Agriculture Committee have advanced competing versions of the legislation.
Industry voices have signalled mixed confidence in the process. Paul Grewal, Chief Legal Officer of Coinbase, noted that crypto showed up ready to work and had made progress.
If the March 1 push fails to produce a compromise text, legislative prospects for the CLARITY Act could falter through the rest of 2026, particularly as midterm elections and committee priorities shift.
Without clear federal statutes, regulatory ambiguity would persist, leaving firms subject to evolving agency enforcement and deterrents for institutional capital deployment.
Observers warn that prolonged uncertainty may slow innovation, restrict clarity around token classification, and leave unresolved questions about which digital assets fall under securities or commodities rules.
Institutional investors, who often require legal certainty before allocating capital, could remain on the sidelines in the absence of a law.
Whether negotiators can reconcile the twin imperatives of protecting consumers and supporting innovation will determine the future trajectory of US crypto regulation.
Markets and industry stakeholders alike are now watching closely as the March 1 deadline approaches.
