The White House has set a March 1 ultimatum to resolve the stablecoin yield dispute blocking the CLARITY Act, the most important US crypto regulation bill in years.
With four days left before the White House's self-imposed March 1 deadline, the CLARITY Act remains stuck on one issue: whether stablecoin issuers can offer yield on idle balances.
The White House set a March 1 deadline to resolve a dispute between banks and crypto firms over stablecoin rewards, a provision that has stalled the Digital Asset Market Clarity Act for months. The bill, which passed the House in July 2025 with bipartisan support (294-134), would give the CFTC jurisdiction over digital commodity spot markets while preserving SEC authority over securities.
The core disagreement centers on whether stablecoin issuers like Circle and Tether can pay yield on idle holdings. Banks argue that allowing stablecoin yield could siphon up to $6 trillion in deposits from the traditional banking system. Crypto firms counter that banning yield would cripple innovation and push activity offshore. After a White House roundtable ended without agreement, the administration requested a compromise proposal by end of February.
The CLARITY Act is widely considered the most significant piece of US crypto legislation since the industry's inception. It would establish clear regulatory boundaries between the SEC and CFTC, ending years of jurisdictional confusion that has driven enforcement-by-lawsuit. Senator Bernie Moreno outlined an ambitious timeline on February 18, suggesting Congress could pass the bill by April.
Prediction markets reflect growing optimism: Polymarket recently showed around 85% odds the legislation passes by end of 2026. Ripple CEO Brad Garlinghouse has stated a 90% chance of passage by April, while Coinbase CEO Brian Armstrong called for a 'win-win-win' outcome, driving prediction market odds higher. However, the Senate Banking Committee has yet to complete its markup, and the stablecoin yield provision remains the key obstacle.
The March 1 deadline is a pressure date, not a legislative hard stop. If no compromise emerges, the CLARITY Act could face further delays in the Senate, potentially pushing passage into Q2 or beyond. The stablecoin yield decision will also shape the GENIUS Act (stablecoin-specific legislation) that Congress is working on in parallel. Markets are watching closely because regulatory clarity has been cited by Goldman Sachs and Grayscale as the primary catalyst for the next wave of institutional crypto adoption.
This is a developing story. The March 1 deadline could produce a breakthrough compromise or further delay, and the outcome will set the tone for US crypto regulation throughout 2026.
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