CLARITY Act Faces Delays as Stablecoin Yield Talks Stall Before March 1 Deadline

The CLARITY Act remains in limbo as negotiations between the crypto industry and banking groups fail to produce a compromise ahead of the White House’s March 1 deadline. Lawmakers and stakeholders are working to finalize draft language that would clarify regulatory oversight, define stablecoin rules, and reduce tensions between traditional financial institutions and digital asset firms.

According to reports, discussions around stablecoin yield remain the primary sticking point. Representatives from crypto companies and bank associations have met multiple times, yet no agreement has been reached. While yield on idle or passive stablecoin balances appears unlikely to be approved, debate continues over activity-based rewards tied to transactions or platform usage. Banking groups argue that high-yield stablecoin products could divert deposits away from traditional lenders, while crypto advocates warn that restricting incentives would limit competition and innovation.

The White House has introduced its own draft of the CLARITY Act during closed-door meetings with major crypto firms such as Coinbase, Ripple, and a16z, alongside banking representatives. Officials have emphasized the urgency of reaching an agreement to move the Senate forward. The draft reportedly includes anti-evasion penalties, and once stablecoin provisions are resolved, lawmakers are expected to focus on decentralized finance (DeFi) regulation and ethics requirements.

Prediction markets reflect growing uncertainty about the bill’s timeline. Polymarket estimates a 51% chance the CLARITY Act becomes law in 2026, while Kalshi places the odds of passage before May at 35%. Investor sentiment has softened, especially after President Donald Trump did not reference crypto in his recent State of the Union address. Analysts note that clear stablecoin regulation and defined agency oversight under the CLARITY Act could reduce enforcement risks for banks and institutional investors, but political and macroeconomic pressures continue to cloud expectations.