TL;DR:
- Stablecoins and the debate over their yields have left the CLARITY Act stalled after a third round of negotiations at the White House.
- Banks demand strict restrictions on interest-like payments tied to stablecoins, while the crypto industry defends them as key to adoption.
- Without an agreement, crypto firms risk moving their operations to jurisdictions with clearer rules, weakening the influence of the digital dollar.
The White House held on Thursday a third round of negotiations on the CLARITY Act, bringing together top crypto industry leaders alongside representatives from the banking sector. The central issue remains the same: whether stablecoin issuers and the platforms that distribute them should be allowed to offer yields to their users.
The discussions involved Ripple, the Blockchain Association, the Crypto Council for Innovation, and the leading banking trade groups. Paul Grewal, Chief Legal Officer of Coinbase, described the conversations as constructive and cooperative, though he added that work still lies ahead. According to sources consulted, no agreement was reached, leaving the bill at a standstill.
The Yield Dilemma in Stablecoins
The banking sector is pushing to impose strict limits on interest-like payments associated with stablecoins, arguing that on-chain yield products could divert deposits from the traditional financial system and distort competition. The crypto industry, on the other hand, maintains that yields are essential for mass adoption and user base growth.
The most recent precedent is the GENIUS Act, passed last year, which prohibits stablecoin issuers from paying direct interest but allows third-party platforms such as Coinbase to offer rewards. This point turned Coinbase into a central piece of the conflict, to the extent that it withdrew its support for a vote in the Senate Banking Committee over disagreements on yields.
In previous White House meetings, banks proposed a total ban on any benefit for holding or using stablecoins, imposing strict enforcement mechanisms and marketing limits. The industry responded by proposing a framework closer to the Senate draft, which includes a two-year study period on the impact on bank deposits.
Against Holders and Savers
The CLARITY Act seeks to define clear regulatory authority over cryptocurrencies, dividing oversight between the SEC and the CFTC. Current amendments would allow exchanges to offer yields only if users are actively transacting or transferring their stablecoins, blocking the possibility of passive holders earning interest simply by keeping funds in their accounts.
Beyond the technical details, legislative analysts warn that political factors —voting timelines, partisan divisions, and uncertainty around appointments at the SEC and the CFTC— could represent greater obstacles than the yield rules themselves. If the CLARITY Act is delayed or establishes ambiguous rules, crypto firms could redirect their operations toward jurisdictions with more favorable frameworks, eroding U.S. influence over the digital dollar system.
