White House backs transaction-based stablecoin rewards in CLARITY Act talks

The White House is attempting to steer stalled crypto legislation back on course by narrowing the debate over stablecoin rewards, advancing a proposal that would permit incentives only when tied to specific transaction activity rather than holdings.

During a third closed-door meeting on Thursday, senior representatives from crypto firms and major banking trade groups gathered at the White House as negotiations intensified over one of the final unresolved provisions in a broader market structure bill.

White House crypto adviser Patrick Witt led the latest round of discussions, according to reporting by journalist Eleanor Terrett. 

Witt reiterated a compromise framework previously floated in earlier sessions, allowing third parties such as exchanges to provide activity-based incentives while excluding fixed returns on balances.

“Earning yield on idle balances, a key crypto industry goal, is effectively off the table,” Terrett reported, citing meeting participants, adding that discussions have narrowed to whether firms can offer rewards linked to certain activities.

“Bank trade groups will brief their members on today’s discussions and gauge whether there’s room to compromise on allowing crypto firms to offer stablecoin rewards,” she added.

Terrett also cited one source who said that “an end-of-month deadline doesn’t seem unrealistic.” 

Although no agreement was reached, participants characterised the latest meeting as substantive. 

Ripple chief legal officer Stuart Alderoty wrote on X that representatives “rolled up our sleeves and went through specific language today.” 

Coinbase chief legal officer Paul Grewal described the exchange as “constructive and the tone cooperative,” adding that further engagement would follow. 

Crypto legislation delayed

Thursday’s meeting followed two prior sessions on Feb. 2 and Feb. 10, part of an accelerated effort to resolve differences before the Senate moves forward on comprehensive legislation to define how digital assets will be regulated. 

Lawmakers are looking to clarify the division of oversight between the Commodity Futures Trading Commission and the Securities and Exchange Commission, while setting new standards for trading platforms, issuers, and intermediaries.

The dispute over rewards stems partly from legislative gaps left by last year’s stablecoin law, commonly referred to as the GENIUS Act, which barred issuers from paying direct interest to holders but did not explicitly restrict third-party platforms from offering incentives. 

The pending CLARITY Act was designed to address those ambiguities and create a cohesive regulatory framework.

However, momentum stalled in mid January 2026 when Senate Banking Committee Chairman Tim Scott postponed a scheduled markup, citing the absence of bipartisan consensus.

Industry dynamics also contributed to the delay. 

Coinbase briefly withdrew support for the draft, arguing that stringent limits on rewards could disadvantage US-based stablecoins relative to offshore competitors.

Meanwhile, Banking groups, including the American Bankers Association, have pressed for tighter guardrails. 

During the Feb. 10 session, they warned that permitting yield on stablecoins could prompt deposit migration from community banks into digital wallets, affecting liquidity for mortgages and small business lending.