White House Proposes Stablecoin Rewards Compromise as CLARITY Act Odds Drop to 44%

The White House moved to break the stablecoin impasse last Friday at ETHDenver, proposing that holders cannot earn yields on idle coins under draft language tied to the CLARITY Act. Crypto Council Executive Director Patrick Witt outlined the compromise to industry and bank leaders after a closed-door session. The talks aim to resolve the rewards dispute by March 1 and restart Senate action.

CLARITY Act Talks Narrow Stablecoin Yield Provision

As per Crypto in America, the core compromise for the CLARITY Act is that firms would not offer yield on idle stablecoin balances. That objective, long pursued by crypto companies, is now effectively off the table. Instead, negotiators narrowed the debate to rewards tied to activity, such as transactions or network participation.

According to Witt, the gap between banks and crypto firms “shrunk considerably” after last week’s meeting. The White House digital assets adviser previously said that the recent closed-door meeting was a big step forward for stablecoin yield. 

The draft addressed concerns raised in a recent banking framework on stablecoin yield limits. Notably, any restrictions would be narrowly scoped. A banking source said the proposed anti-evasion language would allow the SEC, Treasury, and CFTC to enforce the idle-yield ban. Civil penalties could reach $500,000 per violation, per day.

Witt said ethics concerns tied to President Donald Trump’s family crypto dealings remain under discussion. However, he described them as less central than the CLARITY Act rewards issue. Once negotiators finalize language, the Senate Banking Committee could reschedule its postponed January 15 markup. Chairman Tim Scott will decide the timing.

Industry and Bank Groups Face Off

The session included representatives from Coinbase, Ripple, and Andreessen Horowitz. Last week, Coinbase Chief Legal Officer Paul Grewal said discussions around the crypto bill remained constructive and cooperative. Despite this, Polymarket odds on Clarity Act odds of passing fell to as low as 44% but have since recovered to 52% as the March 1 deadline approaches with no meaningful movement on a compromise.

Source: Polymarket

Trade groups Blockchain Association and Crypto Council for Innovation also attended. Bank perspectives came from the American Bankers Association, Bank Policy Institute, and Independent Community Bankers of America.

As Coingape reported, the third White House meeting on the CLARITY Act was held on Thursday, with Ripple, Coinbase, and bank representatives attending. Now, banks argue that rewards could pull deposits from traditional institutions and raise systemic risk. Meanwhile, crypto firms warn that broad restrictions would curb innovation and favor incumbents. The White House inserted itself more directly than in prior meetings to bridge that divide.

Witt told Crypto In America, officials seek a resolution by March 1 for the CLARITY Act. He said good-faith engagement could unlock faster movement. Much reconciliation between stakeholders is already happening in parallel.