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The final legislative effort to align crypto markets with mainstream finance now faces serious risk as divisions deepen in Washington over the Clarity Act. The dispute centers on stablecoin rules and pits major crypto firms against the U.S. banking industry. As tensions rose, the White House stepped in to prevent the bill from stalling further.
On Monday, White House crypto czar David Sacks will host banking and crypto trade groups alongside Coinbase Global. People familiar with the matter said the meeting could expand into multiple rounds of negotiations. The goal is to resolve disagreements blocking progress in the Senate.
The Clarity Act already cleared the House of Representatives and now sits stalled in the Senate. Lawmakers remain split on technical provisions that will shape the future of crypto oversight. Can lawmakers bridge the divide before the legislation loses momentum?
The conflict escalated over whether crypto platforms should pay yield on stablecoin balances. Banks warned such products could shift deposits away from traditional institutions. Crypto firms argued the rewards encourage adoption and innovation.
Cody Carbone, CEO of The Digital Chamber, said the bill aims to create a foundational crypto framework. He added that stablecoin rewards have overtaken broader regulatory goals. His group plans to attend the White House meeting.
The bill also seeks to clarify the respective oversight roles of the Securities and Exchange Commission and the Commodity Futures Trading Commission. Lawmakers remain divided on how authority should be split. That disagreement slowed progress across committees.
In mid-January, Coinbase withdrew support for the bill in its current form. The company cited late changes affecting stablecoin rewards. Executives said the draft could reduce customer incentives.
Following the withdrawal, the Senate Banking Committee delayed a scheduled markup. The postponement intensified pressure to renegotiate key sections. The committee has since delayed the hearing twice.
Coinbase CEO Brian Armstrong rejected the revised draft on January 14 in a post on X.
He said amendments would eliminate stablecoin rewards and raised other concerns.
Hours later, lawmakers postponed the markup again.
Last Thursday, the Senate Agriculture Committee passed part of the bill on a 12-11 party-line vote. Analysts said the narrow margin complicates further progress. Democratic support remains limited.
TD Cowen policy analyst Jaret Seiberg warned the strategy lacks durability. He estimated the bill needs support from ten Democratic senators. Without that backing, Senate approval remains uncertain.
In December, lawmakers met with major bank CEOs to discuss the bill. Soon after, the Banking Committee pushed its markup date to January. Those delays continued as negotiations stalled.
David Sacks will oversee Monday’s meeting between banking and crypto groups. The White House aims to narrow differences blocking Senate action. Officials see mediation as necessary after months of stalemate.
Days after rejecting the draft, Armstrong attended the World Economic Forum in Davos. He said he planned to meet bank CEOs to seek a compromise. He described the effort as a potential win for both sides.
Some crypto firms, including Ripple and Circle, support parts of the Clarity Act. Others continue to push for revisions before endorsement. Negotiations now shape whether the bill advances or remains stalled.
Read More: White House Steps In as CLARITY Act Odds Slip to 57% as Crypto Executives Call For a Meeting
The Clarity Act remains stalled as banks and crypto firms clash over stablecoin yield rules and regulatory control. The White House has stepped in to mediate talks involving Coinbase and trade groups. The outcome will determine whether U.S. crypto regulation advances or remains delayed.
