White House Standoff: Will the $6 Trillion Stablecoin “Yield War” Kill the CLARITY Act by March 1?
Washington D.C. is preparing for a major meeting tomorrow, February 20, as Congress gathers at the White House...
Quick overview
- Washington D.C. is set for a crucial meeting on February 20 to discuss the future of the CLARITY Act, which impacts the $180 billion stablecoin market.
- Banks are concerned about losing up to $6 trillion in deposits to higher-yielding stablecoins, prompting calls for a total ban on rewards for holding these digital assets.
- The crypto industry, represented by leaders like Coinbase and Ripple, is advocating for competitive yields while suggesting compromises on certain types of rewards.
- With a March 1 deadline looming, the outcome of this meeting could significantly influence the regulatory landscape for digital assets in the U.S.
Washington D.C. is preparing for a major meeting tomorrow, February 20, as Congress gathers at the White House for the third time to try to save the CLARITY Act.
What’s at stake is the future of the $180 billion stablecoin market and the possible shift of $6 trillion in bank deposits into crypto. With a March 1 deadline, banks are trying to protect their business, while crypto companies push for new opportunities.
The ‘Yield War’: Why 4% stablecoin rewards worry banks
The main obstacle to passing the Digital Asset Market Clarity Act (CLARITY Act) is not technical, but financial.
Right now, stablecoins like USDC offer much higher yields on some platforms than the less than 1% interest rates at most big banks. Bank of America CEO Brian Moynihan recently warned that if these rewards keep growing, as much as $6 trillion could move from traditional savings accounts to digital options.
The ‘Yield and Interest Prohibition Principles’
A leaked document from the February 18 session shows that banking lobbyists suggested a strict ‘scorched earth’ policy:
- Total Ban: No person or platform would be allowed to offer any kind of reward, financial or otherwise, for holding a payment stablecoin.
- Anti-Evasion: There would be strict rules to stop crypto companies from hiding interest as marketing bonuses or cash-back offers.
- The ‘Main Street’ Exception: Banks would consider exemptions only if they do not cause deposit flight that could hurt local lending.
🚨NEW: A third stablecoin yield meeting is set to take place at the White House tomorrow at 9:00 A.M. ET. A small group representing crypto and banks is expected to attend. More in the A.M. https://t.co/XIYW25VDSA
— Eleanor Terrett (@EleanorTerrett) February 19, 2026
Coinbase & Ripple: ‘Don’t Kill the Competition’
The crypto industry is not giving up. Coinbase CEO Brian Armstrong, who withdrew support for an earlier version of the bill, has called the banking lobby’s efforts ‘regulatory capture.’
“It feels deeply unfair that one industry would come in and use the law to ban their competition,” Armstrong told Fox Business. “They should have to compete on a level playing field.”
Ripple’s Chief Legal Officer Stuart Alderoty, who attended the latest White House session, is cautiously optimistic and says that ‘compromise is in the air.’ The crypto industry has reportedly offered a big concession: they might agree to ban ‘static holding yields’ (rewards for simply holding coins) if they can keep ‘transaction-based rewards’ (rewards for using coins in the economy).
The Countdown: March 1 Deadline
White House officials, led by Patrick Witt, have given negotiators until March 1, 2026, to reach a deal. If they do not, the CLARITY Act, which already passed the House in 2025, could face indefinite delays in the Senate and leave the U.S. in a regulatory gray area.
| Stakeholder | Core Demand | Potential Compromise |
| Traditional Banks | Ban all stablecoin rewards to protect deposits. | Allow non-monetary rewards (loyalty points). |
| Crypto Firms | Preserve the right to offer competitive yields. | Agree to ban interest that mimics “bank deposits.” |
| U.S. Congress | Federal oversight and consumer protection. | Create a new “Stablecoin Yield” license category. |
What This Means for You
If banks win, new investors could see the end of high-yield crypto savings accounts. For experienced investors, passing the CLARITY Act could finally open the door for more institutional money to enter the U.S. market and provide the legal certainty that has been missing for years.
The Market Verdict: Prediction markets like Kalshi now give the bill a 59% chance of passing in 2026. Tomorrow’s meeting could change those odds a lot.
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