CLARITY Act deadline passed in March; stablecoin yield controversy hinders legislation

The March 1 deadline set by the White House Cryptocurrency Committee for stablecoin legislation has passed, but the stability coin provisions in the CLARITY Act remain stalled. The core disagreement centers on the issue of stablecoin yields: crypto companies want the legal right to offer users rewards on stablecoins, while banks are concerned about deposit outflows and strongly oppose any form of stablecoin yield arrangements.

Key Dispute Over Stablecoin Yields: Banks vs. Crypto Industry

The reason the stability coin provisions in the CLARITY Act have yet to reach consensus is the fundamental split over whether stablecoins can offer yields. Crypto firms seek the legal right to provide regulated rewards on mainstream stablecoins like USDC to attract and retain users.

Banks strongly oppose this: if users can earn 4% to 5% yields on stablecoins, compared to just 0.01% on traditional savings accounts, large deposit outflows could accelerate from traditional banks, posing systemic financial risks. An industry insider noted that most agree stablecoin balances should not generate interest directly, but crypto companies are still attempting to offer yields indirectly through “membership programs, rewards, and staking” — which banks see as circumventions that hinder negotiations. The Office of the Comptroller of the Currency (OCC) also hinted in its latest GENIUS bill rulemaking that stablecoin rewards might face stricter restrictions than crypto industry expects, indirectly strengthening the banks’ negotiating position.

Core Disputes in the CLARITY Act Stablecoin Provisions

Crypto Industry Demands: Legally offer regulated yield rewards to users holding stablecoins like USDC

Banks’ Resistance: Worry about deposit outflows, advocate for strict limits or outright bans on stablecoin yields

OCC Position: Implies stablecoin rewards will face tighter restrictions, supporting banks’ negotiation stance

Contingency Plan Disputes: Crypto’s “membership programs, staking, and rewards” are viewed by banks as de facto interest

Legislative Deadline: The White House-set deadline of March 1 has passed, and no compromise has been reached

Future of the CLARITY Act and Market Risks

Although the March deadline has passed, the legislative process for the CLARITY Act is not over, but the timeline is tightening. The Senate Banking Committee is expected to hold hearings in mid to late March, with preliminary negotiations tentatively starting in April, and a final deadline set for July — aiming to reach consensus before the election cycle to avoid prolonged political deadlock.

If the CLARITY Act cannot be enacted within this framework, the market faces two major risks: first, SEC and OCC may pursue enforcement actions to fill regulatory gaps, creating greater uncertainty; second, the large institutional capital inflow predicted by JPMorgan by the end of 2026 could be significantly delayed due to ongoing regulatory uncertainty.

Stablecoin legislation is widely viewed as a key prerequisite for mainstreaming cryptocurrencies in the U.S. If legislation stalls, regulatory uncertainty will continue to burden crypto firms, and innovative projects may continue migrating to regions with more favorable regulatory environments, such as Europe and Asia.

Frequently Asked Questions

Why did the CLARITY Act fail to pass before March 1?

The main obstacle was the disagreement over stablecoin yields. Crypto companies want the legal right to offer stablecoin rewards, while banks worry this could lead to deposit outflows. Both sides failed to reach consensus before the White House’s March 1 deadline, even through “membership programs, staking,” and other workarounds, which banks find difficult to accept.

What is the legislative timeline after the CLARITY Act?

The Senate Banking Committee is scheduled to review in mid to late March, with preliminary negotiations starting in April, and a final deadline set for July. If no agreement is reached before July, the U.S. could face a longer political deadlock due to the upcoming election cycle.

What impact does the stall in the CLARITY Act have on the market?

If legislation remains stalled, SEC and OCC may pursue enforcement actions to fill regulatory gaps, increasing market uncertainty. JPMorgan’s forecasted large-scale institutional inflows by the end of 2026 could be delayed, and more crypto projects might shift to regions with clearer regulatory frameworks.