"CLARITY Act" Negotiations: White House Supports "Conditional Interest for Stablecoins," Banking Industry's Compromise Nears

The legislative battle over the U.S. “Digital Asset Market Clarity Act (CLARITY)” has reached a new development. According to CoinDesk, sources familiar with the matter revealed that the White House held its third closed-door meeting on February 19, bringing together Wall Street banks and crypto industry representatives for negotiations.

Although the final compromise plan has not yet been officially announced, insiders confirmed that the White House has explicitly expressed support for a “limited stablecoin reward mechanism.” If the banking industry is willing to accept it, this provision will be formally included in the next draft.

This bill, which concerns the structure of the cryptocurrency market, was originally scheduled for line-by-line review on January 15 of this year but was unexpectedly postponed indefinitely at the last minute. The core issue causing the delay is whether stablecoins should be allowed to pay interest.

The U.S. banking sector strongly opposed this, arguing that the previously enacted GENIUS Act permits crypto platforms to offer rewards on stablecoins, which they see as undermining the core deposit-based business model of banks. Therefore, they demanded a complete ban on stablecoin reward mechanisms in the CLARITY bill.

Sources said that during the previous round of negotiations, banking representatives brought a “no compromise” stance document, nearly causing the talks to break down. To break the deadlock, the White House took a tough stance during Thursday’s meeting. The session, originally scheduled for two hours, ran significantly over time. White House officials even confiscated participants’ phones at one point, exerting strong pressure on both sides and explicitly stating that no one was allowed to leave until a consensus was reached.

In response to the banking sector’s demand for a complete ban on stablecoin rewards, the White House negotiation team, led by Patrick Witt, an advisor to President Trump on cryptocurrency, proposed a compromise:

• Static holdings should not earn interest: purely holding assets similar to bank deposit accounts should be prohibited from receiving rewards to protect banks’ profit margins.
• Dynamic transactions can receive rewards: for specific on-chain activities and transactions, crypto platforms must be allowed to offer partial rewards.

Insiders revealed that the White House has made it clear to banks that the next version of the bill will retain some stablecoin rewards. Representatives from Wall Street banks present at the meeting have softened their stance and have begun participating directly in drafting the language of this provision. After consolidating feedback, the White House has prepared an updated draft for review.

Patrick Witt emphasized to attendees that reaching a consensus on the stablecoin reward mechanism is urgent; otherwise, the overall legislative process will continue to stall.

The White House’s strategy is very clever. If the banking industry refuses to accept this “limited reward” plan, the existing GENIUS Act will remain in effect, giving crypto platforms greater flexibility in offering rewards. Conversely, if banks accept the “limited and controllable” design, it could help persuade hesitant senators to support the bill again.