Clarity Act Loses Clarity Over Trump’s UAE Crypto Deal

White House-led negotiations over the Clarity Act ended Monday without a deal, as the crypto industry and banking lobbyists failed to bridge their differences on stablecoin yields, and a newly revealed $500 million investment by a UAE official in President Donald Trump’s family crypto venture threatens to further complicate the bill’s prospects.

The Clarity Act was designed to bring regulatory certainty to America’s crypto markets. Instead, it has become entangled in a conflict-of-interest controversy that could derail the administration’s top crypto priority—and reshape the future of digital finance in the process.

The meeting at the Eisenhower Executive Office Building, hosted by presidential crypto adviser Patrick Witt, brought together representatives from Coinbase, Circle, and Ripple, as well as banking trade groups. After more than two hours, participants left without agreement on whether crypto exchanges should offer interest on stablecoins.

Crypto participants, who significantly outnumbered bankers, felt banks were stalling. The White House directed both sides to reach a compromise by month’s end.

The stakes are enormous. Treasury analysis estimates up to $6.6 trillion in deposits could migrate from banks to stablecoins if yields are permitted. Banks warn this would create an unregulated parallel financial system; crypto executives counter that banks simply fear competition.

The dispute escalated in January when Coinbase CEO Brian Armstrong withdrew his support for the draft bill, saying he would rather have no legislation than flawed legislation.