"CLARITY Act" Standoff Reaches Deadlock, Banks and Crypto Industry Firm in Positions, White House Calls for Compromise by End of Month

On February 14, the deadlock over stablecoin yields in the U.S. Senate’s Crypto Market Structure Bill (known as the CLARITY Act) escalated—with crypto advocates arguing user rewards are non-negotiable. This week, a second White House meeting between Wall Street bankers and crypto executives collapsed—despite Trump administration officials pressing for compromise. Banks adopted a hardline stance, claiming any stablecoin yield or reward is unacceptable, as it would undermine the U.S. banking system’s core deposit-taking business. Their position was laid out in a one-page paper: *“Revenue and Interest Prohibition Principle.”* On Friday, the Chamber of Digital Commerce (CoDC) countered with its own principles document, endorsing the Senate Banking Committee’s draft terms for acceptable reward scenarios. The group clarified it would back the bankers’ proposed two-year study on stablecoins’ impact on deposits—provided the study does not automatically trigger regulatory rulemaking. CoDC CEO Cody Carbone said: “We want policymakers to know we view this as a compromise.” The industry group has formally signaled it will forgo static holding rewards that resemble bank savings account interest. Carbone noted the crypto sector’s concession is significant—especially since last year’s GENIUS Act is already law—but stressed transaction and other activity-based rewards must be preserved. He urged banks to return to the negotiating table. “*If they don’t negotiate, rewards stay as usual,*” Carbone said. “*If they do nothing and push for a total ban, this won’t get resolved.*” He hopes the new document will reignite talks after the recent failed White House meeting. CoDC’s principles document emphasizes protecting two reward categories: liquidity provision rewards and ecosystem participation rewards. It notes these two provisions (in the bill’s Section 404) are critical for decentralized finance (DeFi). Reports indicate the White House is pushing for a compromise by month’s end. Though banks have not budged in multiple meetings, Trump crypto advisor Patrick Witt said a new round of talks could be scheduled next week.