CLARITY Act Misses March 1 Cutoff — Stablecoin Rewards Fight Keeps Bill in Limbo

Is the CLARITY Act stalling — or quietly inching toward a breakthrough? A March 1 deadline set by White House Crypto Council Executive Director Patrick Witt for banks and crypto firms to resolve their dispute over stablecoin rewards came and went with no announcement. The silence has reignited doubts over whether the Digital Asset Market Clarity (CLARITY) Act can clear Congress or will slip into another year of gridlock.

Insiders say the March 1 date was never a strict legal cutoff but a political push to force compromise. Negotiations are continuing, with both sides still haggling over precise bill language — most notably who can offer rewards on stablecoin balances. “Overindexing on March 1 is a mistake,” one source close to the talks told AMBCrypto.

What’s holding things up
– Banks and crypto companies broadly agree that stablecoin balances shouldn’t earn interest in the traditional sense. But crypto firms are reportedly trying to preserve yield-like returns via membership programs, rewards, and staking — mechanisms banks view as a backdoor for APY. That tension appears to be the core sticking point.
– Regulators have also weighed in. Earlier optimism that the GENIUS Act might shield third-party platforms from limits on issuer rewards has been tempered by the Office of the Comptroller of the Currency (OCC), which suggested such third-party reward programs could run counter to the law’s intent. That pushback increases legal uncertainty for exchanges and other intermediaries.

Political timetables and market signals
The Senate Banking Committee is expected to revisit the CLARITY Act later in March. If lawmakers can bridge remaining differences, the bill could proceed to a full Senate vote and potentially end the current “regulation by enforcement” era — where companies face enforcement actions instead of clear rules — according to some analysts.

JPMorgan Chase analysts recently flagged the CLARITY Act as a potential major driver for crypto markets in H2 2026, suggesting a mid-year passage is possible if negotiations conclude. But market sentiment remains volatile: Polymarket prediction prices flipped wildly in late February and early March — dropping from 72% to 42% chance of passage on Feb. 24, then bouncing from ~56% to 73% within hours as March began — underscoring how uncertain the outcome remains.

Voices from the ecosystem
Amanda Tuminelli, executive director of the DeFi Education Fund, said progress is being made but flagged that DeFi concerns are being overshadowed by the yield debate. “I think overall things are moving, and it feels like issues are being closed out, but DeFi has taken a backseat to the yield conversation. We’re waiting for Senate Banking to announce the next markup date and updated text, so I think everyone is anxiously awaiting to see what the next draft looks like.”

What’s next
Negotiators face pressure to settle outstanding language before the Senate Banking Committee’s next review. The coming weeks will likely determine whether the CLARITY Act regains momentum toward a Senate vote or becomes another postponed reform. The decision will shape how the U.S. balances financial stability and crypto innovation for years to come.

Disclaimer: This article is informational and not investment advice. Trading or investing in cryptocurrencies involves significant risk; readers should perform their own research before making decisions. © 2026 AMBCrypto

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