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What’s happening? The White House hosted a second round of negotiations between banks and crypto firms over the CLARITY Act. Ripple’s CLO Stuart Alderoty called the talks “productive,” with early signs of compromise emerging. Banks submitted their first written concessions on stablecoin yield, though no agreement has been finalised. A 1 March deadline has been set.
The United States is edging closer to passing its first comprehensive crypto market structure law after a White House–brokered meeting on 10 February showed meaningful progress between the banking sector and digital asset companies.
Ripple Chief Legal Officer Stuart Alderoty described the discussions as “productive,” highlighting growing bipartisan momentum and urging lawmakers to act before the political window narrows.
The session marked the second time in two weeks that the White House convened key stakeholders. Executives from Coinbase, Circle, Andreessen Horowitz (a16z), and Crypto.com joined Ripple on one side of the table, opposite representatives from major US banking lobby groups. At the heart of the negotiations lies a single contentious issue: whether stablecoins should be permitted to offer yield to holders.
The Stablecoin Yield Debate
The Digital Asset Market Clarity Act — widely referred to as the CLARITY Act — seeks to establish a clear framework for how digital assets are classified and regulated in the US. The bill has already passed the House of Representatives and cleared the Senate Agriculture Committee. Its next hurdle is the Senate Banking Committee, where disagreement over stablecoin yield has stalled progress.
Banks argue that allowing stablecoin issuers to pay yield would create deposit-like products outside the traditional banking system without equivalent regulatory oversight. Their concern is that consumers could shift deposits into yield-bearing stablecoins, weakening the funding base that supports lending across the economy.
Crypto firms counter that yield is a natural feature of blockchain-based financial systems and restricting it would undermine innovation. They also warn that banning yield would disadvantage US-regulated stablecoins compared to offshore alternatives that face fewer constraints.
What Shifted in February
The first White House session on 2 February produced goodwill but no concrete movement. Banking representatives arrived without formal proposals. The second meeting was different.
Banks presented a written principles document for the first time. While still advocating a broad prohibition on stablecoin yield, they acknowledged potential exemptions and engaged in detailed discussions about permissible account activities — a notable departure from their earlier refusal to negotiate on specifics.
Industry leaders described the tone as constructive. Alderoty struck an optimistic note publicly, while others signalled impatience that the yield debate could delay the broader market structure bill.
The White House has reportedly set 1 March as a target date for reaching consensus, though whether that timeline holds remains uncertain.
Global Implications
The outcome of the CLARITY Act will resonate beyond US borders. Europe’s Markets in Crypto-Assets (MiCA) framework already provides regulatory clarity for digital assets, but many policymakers expected Washington to follow with its own comprehensive structure.
If the US passes the CLARITY Act with workable provisions on stablecoin yield, it could establish a global benchmark for digital asset regulation. Greater US clarity would also reduce cross-border uncertainty for financial institutions and potentially accelerate institutional capital flows into digital assets.
Market sentiment reflects cautious optimism. Prediction markets currently estimate a roughly 56–59 percent probability of passage in 2026, down from earlier highs. The decline underscores lingering uncertainty, driven by a crowded Senate calendar, approaching midterm elections, and the unresolved yield dispute.
A Narrow Legislative Window
Time is a critical factor. As the midterm election cycle intensifies, legislative bandwidth in the Senate will tighten. Bills that fail to advance before summer face increasingly difficult odds of reaching a vote.
For the crypto industry, prolonged regulatory ambiguity carries tangible costs — from delayed product launches to capital migration into more predictable jurisdictions. Companies and investors alike view the CLARITY Act as the most consequential US digital asset policy initiative this year.
Alderoty’s suggestion that “compromise is in the air” may prove optimistic. Yet for the first time, banks and crypto firms are negotiating from the same written framework. In Washington, that alone represents measurable progress.
