CLARITY Act: Stablecoin Yield Debate Heats Up, but March 1 Deadline Not ‘Do or Die’

The fight over stablecoin yield under the CLARITY Act is getting worse, but despite the noise, negotiations are far from over. Both crypto and banking groups are still actively negotiating over whether stablecoins should be allowed to generate yields. Although the White House hoped for a deal before March, insiders now say an agreement is unlikely in the immediate term.

CLARITY Act Negotiations Continue

According to an X post shared by Fox Business journalist Eleanor Terrett, the CLARITY Act negotiations between the crypto and banking leaders remain ongoing. Despite public tensions, talks have not collapsed, and discussions continue behind the scenes, with both sides still reviewing and revising draft language around stablecoin yield.

Terrett pushed back against circulating reports and rumors suggesting the stablecoin yield talks in the crypto bill were collapsing. Unnamed sources claiming to have participated in last week’s White House market structure bill meeting argued that the talks were close to falling apart.

However, Terrett posited that representatives from the American Bankers Association, the Independent Community Bankers of America, and the Bank Policy Institute, all of whom attended last week’s White House meeting, were surprised by that comment. She stated,

“I shared the post and the Crypto Twitter reaction with a banking-side source who has direct knowledge of the negotiations. They said the bank trade representatives (from Independent Community Bankers of America, and the Bank Policy Institute) who attended last week’s White House meeting were perplexed by the characterization, do not share the unnamed source’s views and have already relayed that to the White House.”

Further, she dismissed claims that the negotiations had taken a “nihilistic” turn. She added that both sides are still actively exchanging draft language and providing input on the bill’s text. This indicates that the talks around the market structure bill are significantly progressing. 

Is a March 1 Settlement Possible?

Previously, the White House expected that a deal on stablecoin yield could be wrapped up before February, thus moving forward with the CLARITY Act. Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, reportedly indicated the negotiations could be completed before March.

Commenting on the March 1 deadline of the market structure bill discussions, the unknown source stated, “Patrick Witt made the unfortunate error of going out to the press and saying he’d get this done before March. It’s not going to get done before March.” This indicates that the negotiations are far from resolved despite expectations of Witt.

Meanwhile, many industry experts came in, defending the efforts of Witt. For example, AI czar David Sacks took to X to comment,

“Patrick Witt is doing an amazing job brokering a compromise between the banks and crypto industry. No one is working harder to get market structure legislation across the finish line. Btw, crypto has made major concessions on stablecoin yield; time for banks to reciprocate.”

However, as noted by Eleanor Terrett, no consensus on the crypto bill is currently in sight. She stressed that March 1 is not necessarily a hard deadline, stating, “Both sides are still giving input on text and aren’t necessarily living or dying by the March 1st deadline.”