Clarity Act Fails March 1 Deadline as Stablecoin Yield Dispute Stalls Progress

The White House’s self-imposed March 1 deadline for banks and crypto to resolve their stablecoin standoff has passed without a deal, leaving trillions in institutional capital in jeopardy. The deadline was set by White House Crypto Council Executive Director Patrick Witt.

At the heart of the impasse is whether crypto firms will have the legal right to offer regulated rewards on stablecoins such as USDC. Banks warn that deposit flight could follow if customers chase 4–5% stablecoin returns instead of roughly 0.01% savings rates, and they are pressing for strict limits or an outright ban.

While there is broad agreement that stablecoin balances should not earn direct interest, crypto firms are pursuing workarounds — membership programs, rewards and staking — that banks say are stalling the deal. The OCC’s recent GENIUS Act rulemaking suggested rewards may face tighter limits than the industry expected.

United States

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