The CLARITY Act, a key U.S. crypto regulation bill, faces continued delays as banks and crypto firms fail to reach an agreement on stablecoin reward programs by a key political deadline. Negotiations continue ahead of an expected Senate Banking Committee review, with market odds on the bill’s passage fluctuating based on the unresolved dispute over interest and rewards.
Negotiations over the Digital Asset Market Clarity Act remain unresolved past a 1st March deadline set by White House Crypto Council Executive Director Patrick Witt, casting doubt on the bill’s progress. Sources state the deadline was a political tactic rather than a strict cutoff, and talks continue between banks and cryptocurrency companies.
A central disagreement involves whether stablecoin balances should earn interest or rewards. While there is reported “agreement in-principle that stablecoin balances shouldn’t earn interest,” crypto firms are allegedly attempting to offer similar benefits through other means. One banking source claimed, “crypto firms are still trying to backdoor APY on balances through membership programs, rewards, and staking. I think that’s what’s holding up the deal right now.”
The Senate Banking Committee is expected to review the bill again soon, with its outcome pivotal for the legislation. According to a report from JPMorgan Chase cited by sources, the CLARITY Act could still be a major market driver in the second half of 2026 if passed. Market sentiment on the prediction platform Polymarket has been volatile, with odds of passage dropping sharply before spiking again, reflecting the ongoing uncertainty.
Amanda Tuminelli, executive director of the DeFi Education Fund, noted that while progress is being made, “DeFi has taken a backseat to the yield conversation.” The recent stance of the Office of the Comptroller of the Currency, which suggested third-party reward programs may violate legal intent, has added further complexity to the negotiations.
