The corridors of power in Washington D.C. are buzzing with renewed discussions around the CLARITY Act, a pivotal piece of crypto market-structure legislation. A recent White House meeting, held on February 10, aimed to break the legislative deadlock, specifically focusing on stablecoin policy. This high-stakes gathering is seen by many market observers as a critical step toward advancing H.R. 3633, a bill that has faced significant procedural hurdles in the Senate. However, progress comes with a potential price: the fate of popular crypto reward programs, like those offering returns on stablecoins such as USDC.
The CLARITY Act's Rocky Road to Legislation
The journey for H.R. 3633 has been anything but smooth. After passing the House, the bill was referred to the Senate Banking Committee in September 2025. An executive session to consider the bill, initially planned for January 15, was publicly announced as “POSTPONED,” leaving the crucial legislation without a new markup date on the committee calendar. This postponement created an explicit moment of uncertainty for the industry's legislative timeline.
Prior to the latest meeting, a White House-led stakeholder discussion on February 2 concluded without a consensus on stablecoin yield or rewards. Participants left with a commitment to continue talks, signaling that a single, definitive negotiation was unlikely. Instead, incremental rounds of discussions are expected as policymakers navigate the complex landscape of digital asset regulation.
The Heart of the Matter: Stablecoin Yield and Bank Concerns
At the core of the dispute lies the debate over whether stablecoin holders should be able to receive interest-like returns. This isn't just a technicality; it's tied directly to the product economics visible in consumer offers. For instance, Coinbase advertises “3.50% rewards on USDC” as part of its Coinbase One program. While these rates come with caveats about being subject to change and regional variations, they present a compelling alternative to traditional banking products.
The policy argument hinges on how these payouts are classified: are they simple rebates or loyalty benefits, a substitute for bank interest, or a yield product demanding securities-style scrutiny? The financial world is closely watching this distinction.
The Wall Street Journal highlighted the stark contrast: stablecoin rewards hover around 3.5%, significantly higher than the approximately 0.1% typically offered by bank deposit rates. This discrepancy fuels concerns among traditional banks, who fear a potential exodus of deposits if stablecoin offerings remain unchecked. The Treasury Department, for example, reportedly estimated a staggering $6.6 trillion potential drawdown in deposits under certain assumptions, a figure that has escalated the dispute from consumer marketing into a systemic-scale policy debate.
“The yield dispute is tied to product economics that are already visible in consumer offers. Coinbase advertises “3.50% rewards on USDC” as part of Coinbase One, while disclosing that the rewards rate is subject to change and can vary by region. Those caveats make “yield” less a protocol-level feature than a distribution decision and a compliance choice.”
Beyond Yield: CLARITY's Broader Scope
While stablecoin rewards dominate current discussions, H.R. 3633 encompasses broader aspects of crypto regulation. The House-passed text includes a crucial “Protection of Self-Custody” clause. This provision explicitly states that consumers retain the right to maintain hardware or software wallets and engage in direct peer-to-peer transactions. This language serves as a vital benchmark for evaluating any final compromise, ensuring that retail custody choices are protected even as intermediaries face increased regulation.
Furthermore, the bill's text addresses decentralized finance (DeFi) by including headings that carve out “DECENTRALIZED FINANCE ACTIVITIES NOT SUBJECT TO THIS ACT” in amendments to both the Securities Exchange Act and the Commodity Exchange Act. This demonstrates that DeFi's scope is not an afterthought but a deliberate drafting issue within the House's approach, signifying the growing importance of clearly defining regulatory boundaries for this innovative sector.
Navigating the Future: Potential Outcomes
The path forward for the CLARITY Act now largely hinges on how negotiators classify stablecoin rewards and how that classification is integrated into the committee text. Several scenarios could unfold:
- Partial Compromise: One likely outcome, consistent with public reporting, is the continuation of talks leading to a partial compromise. Under this scenario, programs branded as “rewards” might survive if they are explicitly tied to activity or membership constructs. However, “passive,” balance-based payouts could be constrained by new statutory definitions or implementing rules. This would push product design toward payments rails, card programs, and usage incentives, rather than a simple annual percentage yield (APY) for holding a stablecoin.
- Optimistic Scenario: A more favorable outcome for the crypto industry would depend on a credible yield compromise that significantly reduces opposition. If enough common ground is found, the Senate Banking Committee could re-calendar its markup, allowing the bill to move forward. As of early February, no new date had been posted to replace the postponed January 15 session, underscoring the uncertainty.
- Downside Path: Conversely, if stablecoin yield remains a persistent veto point, the gap between the House-passed text and the Senate process could widen further. This would extend the current legislative slippage, potentially indefinitely, leaving the industry in a prolonged state of regulatory limbo.
A Global Lens: MiCA's Influence
The U.S. negotiation isn't happening in a vacuum; it’s being shaped by global precedents. The EU’s Markets in Crypto-Assets Regulation (MiCA), for example, provides a significant reference point. MiCA has already established constraints on “interest” for certain crypto-asset tokens, effectively limiting interest-like benefits within parts of the stablecoin category. This puts U.S. drafters in a competitive dilemma: should they align with a more restrictive model, potentially limiting innovation, or permit a rewards channel that functions as cash management for crypto-native and fintech distribution, risking regulatory arbitrage?
What's Next for Crypto Legislation
For now, the crypto industry and policymakers alike are closely watching for concrete signals. The first immediate indicator is whether the reported February 10 White House meeting produces any draft language that effectively resolves the previous deadlock from February 2. The second key marker will be whether the Senate Banking Committee posts a new date to replace the postponed January 15 markup for H.R. 3633. The outcome of these discussions will profoundly shape the regulatory future of stablecoins, crypto rewards, and the broader digital asset landscape in the United States.
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