A tentative deal is reportedly in the works between the White House and US lawmakers over the CLARITY Act, a landmark piece of legislation aimed at regulating the crypto market.
Republican Senator Thom Tillis and Democratic Senator Angela Alsobrooks, both members of the Senate Committee on Banking, Housing, and Urban Affairs, have reportedly reached an “agreement in principle,” according to a Friday Politico report. The deal, which focuses on stablecoin yield, is seen as a significant step toward advancing the CLARITY Act, which has faced delays due to industry concerns.
“I think what it will do is to allow us to protect innovation, but also gives us the opportunity to prevent widespread deposit flight,” Alsobrooks said, emphasizing that the deal prohibits stablecoin yield on ‘passive balances.’ This provision is designed to address banking industry fears that high-yield stablecoins could siphon deposits away from traditional banks, which currently offer much lower yields.
Industry Vetting and Final Touches
Despite the progress, the deal is not yet finalized. Senator Tillis noted that the crypto industry must vet the agreement before it is officially signed off. This step is crucial to ensure that the bill aligns with the industry’s interests and addresses key concerns, such as the ability of stablecoin issuers to share yield with token holders.
Advocacy and Support
Wyoming Senator Cynthia Lummis, a vocal advocate for digital asset policy, expressed optimism about the bill’s prospects. Speaking at the DC Blockchain Summit, Lummis said, “We are so close” to passing a comprehensive crypto regulatory framework. A spokesperson for Lummis added that a deal is expected to materialize in “the next few days,” and that Lummis is working to finalize the ethics language in the bill.
Industry and Banking Concerns
The CLARITY Act, or the Digital Asset Market Clarity Act of 2025, has faced resistance from major industry players, including crypto exchange Coinbase, over provisions related to stablecoin yields. Banks have also voiced concerns, fearing that the bill could erode their market share and cause deposit flight. However, Patrick Witt, the executive director of the White House Council of Advisors for Digital Assets, has downplayed these concerns, arguing that legalizing and regulating yield-bearing stablecoins could attract new capital to the US banking industry.
Looking Ahead
While the CLARITY Act has been a long time coming, the recent developments suggest that a breakthrough is within reach. If the deal is finalized and the bill passes, it could mark a significant milestone in the regulation of the crypto market, potentially paving the way for greater innovation and investor protection. However, the crypto community and the banking industry will be closely watching the final details to ensure that the legislation meets their needs and expectations.
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