The deadlock over the CLARITY Act has escalated, with both banks and the crypto industry maintaining firm stances. The White House demands a compromise be reached by the end of this month.

On February 14th, the deadlock over the stablecoin yield provisions in the U.S. Senate’s Crypto Market Structure Bill (the “CLARITY Act”) has intensified, with the crypto community insisting that user rewards are essential. This week, despite urging both sides to seek a compromise, another White House meeting between Wall Street bankers and crypto executives ended in failure. The banks took a firm stance, asserting that any form of stablecoin yield or reward is unacceptable, claiming such rewards threaten the core of the U.S. banking system—deposit services. They outlined their position in a one-page document titled “Prohibition of Earnings and Interest.” The Digital Chamber countered sharply, releasing its own principles document on Friday, supporting the provisions in the Senate Banking Committee draft that outline acceptable reward scenarios. The document explicitly states that as long as it does not automatically trigger regulatory rulemaking, the bankers’ proposal for a two-year study on the impact of stablecoins on deposits is acceptable. Cody Carbone, CEO of the Digital Chamber, said, “We want policymakers to understand that we see this as a compromise.” Through this document, industry groups have formally indicated their willingness to forgo any static holding rewards similar to bank savings account interest. Carbone pointed out that since last year’s GENIUS Act is already law, the crypto industry’s willingness to give up holding rewards is a significant concession, but rewards for activities like trading should be preserved. Banks should return to the negotiating table. “If they don’t negotiate, then the status quo remains—rewards continue as usual,” Carbone stated. “If they do nothing and demand a total ban, this isn’t over.” He hopes that after the recent unsuccessful White House meeting, this new document can restart negotiations. The Digital Chamber’s principles particularly emphasize protecting two reward scenarios: those related to providing liquidity and those that promote ecosystem participation, considering these two provisions in Section 404 of the draft to be crucial for DeFi. It is reported that the White House has requested a compromise by the end of this month. Although banks have appeared unwilling to make concessions in multiple meetings, Trump’s crypto advisor Patrick Witt indicated that a new round of discussions might be scheduled next week.