- White House sets March 1 deadline to resolve stablecoin yield dispute in crypto bill.
- Draft bans idle stablecoin rewards, allows activity-based incentives under SEC, Treasury, CFTC oversight.
- CLARITY Act progress boosts crypto, aiming for clearer rules and long-term institutional participation.
The White House is pushing forward on crypto regulation, setting a March 1 deadline for progress. The core debate focuses on stablecoin yields, a topic that has sparked tension between crypto firms and banking groups. Lawmakers, regulators, and industry leaders are negotiating how rewards for holding stablecoins should be handled. While some details remain unresolved, discussions are moving quickly, signaling momentum for a long-awaited framework that could reshape U.S. crypto rules.
Stablecoin Yield Debate Heats Up
Lawmakers and regulators met this week to discuss draft legislation for the crypto market structure bill. Representatives from Coinbase, Ripple, a16z, and trade groups joined the talks, alongside national banking associations. The White House led the discussion, presenting draft text and guiding the conversation. The meeting clarified that firms cannot pay rewards simply for holding stablecoins. Traditional savings account-style yields are effectively off the table.
The debate now focuses on whether platforms can offer rewards tied to specific activities, such as lending of crypto or structured usage. Some senators and banking representatives push for a complete ban, while crypto advocates suggest usage-based incentives should be treated differently from interest payments. They argue credit card-style reward programs could serve as a legal and safe model. Enforcement powers are a central concern.
The draft gives the SEC, Treasury, and CFTC authority to penalize violations, with fines reaching $500,000 per day for each infraction. Banks are also requesting a deposit outflow study to analyze how payment stablecoins could affect traditional deposits. Despite these tensions, many see the bill as positive for crypto overall. The broader legislation aims to establish clear rules around custody, exchange oversight, token classification, and the regulatory roles of SEC and CFTC.
Industry Optimism and Next Steps
Following Thursday’s meeting, legal officers from Coinbase and Ripple described discussions as productive. Paul Grewal of Coinbase highlighted the cooperative tone, emphasizing continued dialogue. Ripple’s Stuart Alderoty echoed the sentiment, noting specific legislative language was worked through. Leaders hope these efforts position the U.S. as a global crypto hub.
Ripple CEO Brad Garlinghouse expressed growing confidence in the bill, citing a 90% chance of passage by the end of April. Treasury Secretary Scott Bessent reinforced the urgency, urging Congress to finalize the legislation this spring. Negotiations are expected to continue over the next week, with lawmakers aiming for a formal framework ready by March 1.
The CLARITY Act, as the market structure bill is known, faces a pivotal moment. Resolving the stablecoin yield dispute remains crucial. Once completed, the legislation could provide long-awaited guidance for crypto firms, protect users, and clarify the regulatory landscape. The coming weeks will likely determine how quickly the U.S. solidifies its position in the global crypto market.
