White House Sets March 1 Deadline for Crypto Bill

Key Insights:

• White House sets March 1 deadline for crypto market structure bill negotiations.
• Draft bans idle stablecoin rewards and allows enforcement by SEC and CFTC.
• Banks seek deposit study while lawmakers continue negotiations toward formal framework.

The White House has set a March 1 deadline to advance the crypto market structure bill, often referred to as the Clarity Act. Officials want an agreement in place before the end of the month so the proposal can move forward.

A meeting took place at the White House with representatives from Coinbase, Ripple, a16z, crypto trade groups, and national banking associations. The administration presented draft language and directed the discussion. Stablecoin rewards became the central issue.

Draft Proposes Ban on Idle Stablecoin Yield

The draft states that firms cannot offer rewards simply for holding stablecoins. The savings account style yield model is not permitted under the proposal. One participant described the outcome as “no yield on idle balances.”

The current debate focuses on whether rewards can apply only when tied to defined activities such as lending. Passive holding would not qualify for returns under the draft text.

The proposal gives the SEC, Treasury, and CFTC authority to enforce the rule. Penalties could reach $500,000 per violation per day for firms that fail to comply.

Banks Push for Deposit Study

Banking groups continue to request a deposit outflow study. They want regulators to examine whether payment stablecoins could reduce traditional bank deposits.

The study request remains part of ongoing talks. Banking associations argue that stablecoins used for payments may shift funds away from insured deposit accounts.

Crypto firms seek clear standards under the bill. Discussions narrowed the reward issue but left other points open.

Market Structure Framework Nears Next Stage

The broader bill sets rules for custody, exchange oversight, token classification, and agency roles between the SEC and CFTC. Lawmakers and officials plan to continue negotiations this week.

Participants say an end-of-month agreement remains possible. If talks conclude on schedule, a formal framework could be ready by March 1.

The deadline places the bill on a defined timeline. Industry and banking groups now await further updates as negotiations continue.

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