White House Pushes CLARITY Act Deadline Amid Stablecoin Reward Dispute
The CLARITY Act has been a very long time coming, with some trade specialists now saying the White House is setting a March 1 deadline for either side to succeed in a unanimous settlement.
On February 10, the White House hosted a stablecoin yield assembly, some of the contentious parts of the invoice, bringing collectively representatives from the banking sector and the cryptocurrency trade. According to reviews from folks on web site, the assembly was “productive”, but a compromise has but to be reached.
Coinbase CEO Brian Armstrong emerged as one of the most prominent critics of the Senate draft, elevating issues that the laws may quantity to a de facto ban on tokenized equities and impose restrictions on decentralized finance (DeFi) that the crypto neighborhood views as undermining monetary privateness. Armstrong is just not alone in his opposition, as broader crypto neighborhood sentiment has additionally not been as welcoming of the invoice.
Another key caveat at stake is who controls the digital greenback and whether or not US-based crypto corporations can compete with conventional banks and abroad jurisdictions providing extra versatile frameworks.
Why stablecoin rewards matter?
Stablecoin rewards operate equally to curiosity provided by conventional banks, sometimes generated from revenue on authorities bonds or lending.
According to Joshua Chu, a lawyer, lecturer, and co-chair of the Hong Kong Web3 Association, stablecoin rewards have grow to be a core driver of liquidity and consumer retention for a lot of exchanges at present. They compete with conventional financial savings and DeFi, thus forming a income stream.
Coinbase reported $355 million in stablecoin income within the third quarter of 2025 alone, accounting for 47% of the income generated by its Subscription & Services division. That revenue is primarily derived from curiosity earned on USDC balances held on the platform.
“Stablecoin rewards themselves will not be the core revenue engine, however they’re a key mechanism for attracting and retaining clients, encouraging customers to carry bigger stablecoin balances, which in flip drives reserve-based income,” Nic Puckrin, a digital property analyst and co-founder of the Coin Bureau, stated.
However, Eli Cohen, General Counsel at Centrifuge, argued that the problem could also be extra concentrated than it seems.
“I believe that is principally a Coinbase subject. I’m not conscious of different exchanges the place this can be a vital a part of their enterprise mannequin.”
Cohen additionally instructed that the market influence of limiting stablecoin rewards would rely closely on the ultimate legislative language. If a compromise permitting activity-based yield, corresponding to rewards linked to funding in tokenized real-world asset (RWA) merchandise, is included within the closing invoice, he doesn’t count on vital disruption. In that state of affairs, he stated, customers may shift from a stablecoin holding mannequin to a stablecoin funding mannequin, much like brokerage money sweeps into cash market funds.
Financial stability or aggressive safety?
The disagreement over stablecoin rewards is rooted in deeper issues about deposit flight and monetary system stability.
Daniel Bara, Director of the Olympus Association, pointed to modeling from main monetary establishments. The Federal Reserve revealed an evaluation in December modeling as much as $400 billion in mortgage contraction underneath reasonable stablecoin adoption, whereas Standard Chartered initiatives round $500 billion leaving developed-market banks by 2028.
Those projections are sometimes cited by banks as proof of systemic danger. Bara framed the problem in another way.
“What banks describe as a menace to monetary stability additionally appears like shoppers having access to aggressive returns on their very own cash for the primary time in many years. Lawmakers need to stability each issues, and the way they draw that line will form monetary competitors for the following decade.”
Other specialists have equally acknowledged that stablecoin yields could possibly be perceived as aggressive strain on conventional banks.
“The Clarity Act is making an attempt to protect the established order for conventional banks whereas additionally supporting the burgeoning digital asset ecosystem… stablecoin yields specifically are seen as a menace to conventional financial institution deposits, so limiting them narrows the aggressive hole between banks and crypto exchanges,” Coin Bureau’s Puckrin famous.
Hong Kong Web3 Association’s Chu went additional, arguing that limiting deposit-like yields may successfully reinforce the normal banking deposit mannequin.
Winners and losers
If the CLARITY Act passes in its present kind, specialists say the rapid influence wouldn’t be evenly distributed.
“At this level, the draft advantages banks probably the most, because it protects them from stablecoin yield competitors,” Puckrin stated. While stablecoin issuers may gain advantage from regulatory readability, platforms closely reliant on rewards could face short-term strain.
Chu equally argued that conventional banks would profit domestically from lowered competitors. Internationally, nonetheless, he instructed jurisdictions with extra innovation-friendly frameworks may appeal to capital and companies if US guidelines are considered as overly restrictive.
Olympus Association’s Bara described the broader stakes as a battle over management of dollar-denominated financial savings, noting that even when laws restricts direct yield, financial incentives don’t disappear; they adapt.
A crucial step, however on whose phrases?
Despite disagreement over stablecoin rewards, specialists constantly confused the significance of regulatory readability.
“The Clarity Act is extremely necessary for the digital asset sector as a complete as a result of it will shut the door on the regulatory uncertainty that has all the time held again innovation,” Puckrin stated, cautioning that ready too lengthy could possibly be as dangerous as making extreme concessions.
Chu famous the talk surrounding the CLARITY Act may finally be round who controls stablecoins. He highlighted the US’s “tunnel imaginative and prescient” dangers overlooking international competitors, together with interest-bearing central financial institution digital currencies (CBDCs) overseas, in a contest between defending legacy rails and enabling really aggressive digital finance.
However, different specialists famous the talk facilities extra round composability and utility for stablecoins.
“It is troublesome for legislators and their employees to attempt to match new monetary modes into current frameworks. This has been a difficulty for the crypto markets typically since inception and can proceed to be a difficulty lengthy after the market construction invoice points are resolved,” Cohen stated.
The closing compromise may decide whether or not US coverage primarily preserves current banking constructions or meaningfully integrates crypto-native competitors into the monetary system.
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