WASHINGTON, D.C. — February 19, 2026 — In a high-stakes bid to finalize the United States' first comprehensive crypto market structure law, the White House and Senate leaders have launched an urgent initiative to break the legislative logjam stalling the Digital Asset Market Clarity Act (CLARITY Act). With the midterm election season looming, the administration is racing to resolve a fierce lobbying battle between Wall Street banks and the crypto industry over stablecoin yields, a dispute that threatens to derail the historic CLARITY Act passage 2026 timeline.

White House Intervenes in Senate Banking Standoff

After months of delay in the Senate Banking Committee, the White House has stepped in to mediate the impasse. Patrick Witt, Executive Director of the President’s Council of Advisors for Digital Assets, convened emergency closed-door sessions this week with top banking lobbyists and crypto executives. The goal is to hammer out a compromise on the contentious "yield prohibition" clause before the end of February deadline set by administration officials.

"The window for US crypto regulation news to turn into law is closing," said a senior Senate aide familiar with the negotiations. "If we don't solve the stablecoin interest issue in the next ten days, the entire market structure framework could be pushed to 2027."

The urgency comes after the Senate Agriculture Committee successfully passed its version of the bill earlier this week, leaving the Senate Banking Committee as the final hurdle. Senate Minority Leader Chuck Schumer has reportedly signaled readiness to move the bill to a floor vote once the banking committee clears it, highlighting a rare bipartisan desire to settle the SEC vs CFTC jurisdiction war that has plagued the industry for a decade.

The Core Conflict: Stablecoin Yields and Banking Fears

At the heart of the deadlock is a disagreement over whether crypto exchanges and stablecoin issuers can offer interest-bearing products to customers. The banking lobby, led by major institutions, has aggressively pushed to ban these "rewards," arguing that they create an unregulated shadow banking system that could drain deposits from community lenders.

The "GENIUS Act" Shadow

The dispute is complicated by the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act), signed into law in mid-2025. While that law established reserve requirements for issuers, it left the question of yield-generating products for intermediaries in a gray area. Banks argue that the Digital Asset Market Clarity Act must explicitly close this loophole.

"We are seeing a classic turf war," explains regulatory analyst Sarah Chen. "Banks are terrified of a world where a stablecoin wallet offers a 4% yield with zero fees, effectively replacing the checking account. The crypto industry argues that banning these yields protects legacy incumbents at the cost of consumer innovation."

SEC Chair Paul Atkins and the "Project Crypto" Shift

While Congress debates, regulators are moving forward. SEC Chair Paul Atkins, nearing his first full year in office, has fundamentally reshaped the agency's approach. Under his flagship "Project Crypto" initiative, the SEC has pivoted away from the "regulation by enforcement" era of his predecessor. Atkins testified this week that his agency is ready to implement the CLARITY Act's jurisdictional split immediately upon passage.

"The days of ambiguity are over," Atkins told the Senate Banking Committee. "We have prepared a framework that respects the commodity status of decentralized assets while maintaining robust disclosures for capital formation. The SEC is ready to stand down where the law directs us to."

The bill would formally grant the Commodity Futures Trading Commission (CFTC) exclusive oversight over digital commodities—including Bitcoin and stablecoins—while narrowing the SEC's authority to clearly defined investment contracts. This resolution of SEC vs CFTC jurisdiction is widely seen as the most critical component for unlocking institutional capital.

Political Hurdles: The Conflict-of-Interest Debate

Beyond the economic arguments, political friction remains. Democratic Senators have raised concerns regarding conflict-of-interest rules, specifically targeting the President's personal crypto holdings in projects like World Liberty Financial. Negotiations in the Senate Agriculture Committee earlier this week saw Democrats withhold support until stricter divestment clauses were included.

However, insiders suggest a "grand bargain" is taking shape. Reports from The Block and TD Cowen indicate that the administration may agree to fill vacant Democratic seats at the SEC and CFTC in exchange for dropping some of the more aggressive conflict-of-interest demands. This concession could pave the way for a bipartisan vote in the Senate Banking Committee as early as next week.

What’s Next for the Crypto Market Structure Bill?

As the clock ticks toward March, the crypto market is holding its breath. A successful vote would make the U.S. the first major economy to fully integrate digital assets into its financial code, potentially triggering a massive inflow of institutional funds. Failure, however, would leave the industry in limbo for another election cycle.

For now, all eyes are on the White House. If the administration can broker a truce on stablecoin yield legislation between the banking giants and crypto innovators, the CLARITY Act could be on the President's desk by spring, fundamentally altering the global financial landscape.