CLARITY Act Turns Into Proxy War Over Paying Digital Dollar Holders In US

TLDR

Table of Contents

White House meeting ended without compromise on stablecoin rewards
Banks resist yield on stablecoins citing deposit concerns
Senate Banking links digital assets to capital formation goals
Senate Agriculture draft references CLARITY in parallel framework

TheCLARITY Act is shifting from a market structure bill into a fight over digital dollar rewards. Lawmakers are now focused on who can pay Americans for holding stablecoins.

A recent White House meeting failed to produce a public compromise. The discussion remained centered on stablecoin yield and consumer rewards. As a result, Section 404 has become the core issue in the debate.

White House talks keep yield at the center

Officials met on Feb. 10 to address stalled negotiations around the CLARITY Act. The session was viewed as a chance to move the bill forward. However, no agreement on stablecoin rewards emerged.

Banks remain cautious about allowing yield on stablecoins. They argue that rewards could draw deposits away from traditional accounts. Crypto firms, however, frame rewards as innovation and consumer choice.

The lack of public draft language has extended uncertainty. There is still no markup date scheduled in committee. Without that date, negotiators face limited pressure to finalize terms.

Section 404 governs how stablecoin rewards may be structured. Lawmakers are debating whether rewards count as interest or promotional activity. That distinction could determine which entities may offer them.

Senate Banking keeps growth narrative active

Senate Banking Chair Tim Scott issued a statement tied to a hearing with the SEC chair. He linked digital assets to capital formation and economic growth. The messaging signals continued support for legislative movement.

Lawmakers often signal priorities through public framing. By pairing digital assets with growth themes, the committee keeps attention on economic competitiveness. That message extends beyond the crypto sector.

At the same time, the rewards debate remains unresolved. Consumer-facing benefits are easier for voters to understand. Stablecoin yield has therefore become central to the public discussion.

Banks view yield as a risk to deposit stability. Crypto firms argue that regulated rewards can coexist with safeguards. The committee has not released compromise language that bridges those positions.

Senate Agriculture draft adds parallel track

Senate Agriculture staff are drafting language on digital commodity intermediaries. The draft references the Digital Asset Market Clarity Act in its structure. That cross reference shows coordination across committees.

Parallel drafting can streamline future legislative packages. Shared definitions reduce conflicts between committees. It also allows portions of the framework to advance together later.

While Banking negotiations remain stalled, Agriculture’s work continues. That activity suggests broader planning around digital asset regulation. It also increases pressure to resolve disputes over stablecoin rewards.

If multiple sections depend on common definitions, delays in one area can slow others. As more text references CLARITY, alignment becomes more important. This dynamic keeps attention on resolving Section 404.

What to watch next in the CLARITY debate

A scheduled markup would change the pace of negotiations. It would require lawmakers to publish formal language. That step would also clarify how rewards are treated under federal law.

Observers are watching for compromise language on activity based rewards. Lawmakers may distinguish between passive yield and transaction incentives. Clear definitions could narrow the gap between banks and crypto firms.

Continued messaging from Senate Banking will also matter. Linking digital assets to capital formation builds political support. It may also shape how the bill is presented to the public.