High-level talks in Washington between the White House, major banks, and crypto industry groups resumed this week and registered incremental movement on how stablecoin rewards could be handled inside the CLARITY Act framework. Officials met on February 19–20, 2026, with the White House pressing for language that can be folded into the Digital Asset Market Clarity Act and a March 1, 2026 deadline set to close the rewards dispute.
The central design question is whether rewards are allowed as balance-based yield or only as activity-linked incentives that preserve stablecoins’ payments framing. That choice will shape custody architecture, reporting expectations, and prudential risk controls for issuers, platforms, and institutional users.
Where the compromise is trending
Participants characterized the latest round as constructive but not finalized, with industry leaders describing a pragmatic working posture rather than a signed-off deal. Ji Kim called the session a “focused working engagement,” Paul Grewal said the dialogue was “constructive and the tone cooperative,” and Summer Mersinger described it as a productive step toward resolving reward-related questions.
Banks continue to argue that balance-based yield would look like deposit competition and blur the boundary between payment tokens and bank deposits, which is why they initially pushed for a prohibition on yield-like payments. The White House is advocating a partial compromise that permits rewards tied to transactional activity rather than idle balances, and it is urging banks to accept that middle ground to keep market-structure legislation moving.
Drafting and compliance implications
Negotiators are situating any rewards language inside the CLARITY Act’s broader question of how oversight is divided between the CFTC and the SEC, while additional Democratic conditions remain unresolved. Those conditions include enhanced AML and illicit-finance protections for DeFi protocols, prohibitions on senior government officials directly participating in the crypto industry, and faster nomination and confirmation to fill CFTC and SEC vacancies.
For treasuries and compliance teams, the transaction-based model reads like the most likely near-term constraint because it preserves bank deposit economics while allowing limited consumer-style incentives tied to usage. If agreement is reached by March 1, 2026, the compromise language is positioned to flow into Senate drafting and potentially support a faster path toward action targeting April 2026.
If the deadline slips, the operating environment stays ambiguous and forces banks and platforms to keep modeling multiple legal outcomes at once. In the interim, teams should separate transactional reward flows from balance holdings in governance frameworks, prepare for tighter AML/CTF expectations around DeFi touchpoints, and ensure reporting workflows can adapt if shared SEC–CFTC oversight is codified.
