Stablecoins await rules as White House backs CLARITY Act

CLARITY Act: What Changes and Who Regulates What

The White House publicly endorsed the Digital Asset Market Clarity Act (CLARITY Act) on February 17, 2026, positioning it as a way to end the long-running regulatory stalemate between the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), as reported by FinanceFeeds. The endorsement elevates a bill designed to shift crypto oversight from ad hoc enforcement toward statute-based rules.

At its core, the proposal would draw brighter lines between securities regulation and commodities or spot-market supervision, define clearer registration pathways for trading venues, and set baseline obligations for custody and disclosures. It also puts stablecoin yield or rewards programs on the table for explicit rulemaking, rather than leaving them to inconsistent case-by-case treatment across agencies and states.

If enacted, the framework would aim to give exchanges, token issuers, and wallet providers a predictable federal regime, clarifying who regulates what, and when. The bill’s emphasis on jurisdiction, market integrity, and consumer safeguards is intended to reduce the legal uncertainty that has shaped crypto compliance decisions in recent years.

Why the White House Endorsement Matters Now

The White House’s move signals political prioritization and a willingness to broker compromises on contentious issues like stablecoin yield and the SEC–CFTC jurisdiction split, according to Elliptic. That signal can accelerate committee negotiations and tee up floor consideration, especially where technical disagreements rather than philosophical divides have been the binding constraint.

“[The CLARITY Act] could be a ‘game changer’ for institutional adoption of crypto,” said Mark Palmer, analyst at Benchmark, as reported by CoinDesk. The view reflects how persistent legal uncertainty has kept banks, asset managers, and publicly listed platforms from scaling digital-asset products despite evident customer interest.

Supporters have described the bill as close to the finish line following the White House endorsement, with next steps likely including final committee work and floor votes, as per TradingView. The legislative window remains time-sensitive ahead of the November 2026 midterms, according to Coinpaper, which means momentum now may prove decisive for whether a comprehensive framework is enacted this cycle.

Immediate Market and Policy Impact to Watch

Consumer advocates warn the proposal could weaken investor safeguards if it shifts too much authority from the SEC to the CFTC. Consumer Reports has argued the bill prioritizes industry certainty over consumer protection and risks diluting federal investor-protection standards if not amended.

State-focused policy groups say federal preemption or constraints on state action could hamper responses to fraud and unfair practices, especially around stablecoin yield. The Woodstock Institute cautions that allowing yield on stablecoins could also draw deposits away from insured banks, with potential knock-on effects for community lending and financial stability if not addressed.

Industry alignment is not absolute. Forbes has reported that Coinbase, while supportive in principle, has at times pulled formal support over stablecoin-yield language, an indication that the final contours of permissible rewards programs remain a key negotiation lever.

At the time of this writing, market context is mixed: Ethereum (ETH) trades near $2,002.88 with very high 18.44% volatility and an RSI(14) around 35.64, while Coinbase shares change hands about $165.62 in overnight trading and are roughly down 26.59% year to date. These figures underscore that policy headlines may intersect with already cautious sentiment and elevated dispersion across crypto-related assets.

SEC–CFTC Jurisdiction Split Explained with Examples

Committee materials and expert testimony have emphasized clearing up ambiguity across three fronts: spot markets for non-security digital assets, token offerings that resemble investment contracts, and derivatives, according to Congress.gov. The CLARITY Act is described as a vehicle to codify these boundaries so market participants can register once, under the right statute, and operate with consistent supervision.

Centralized exchange example: A U.S. venue that lists spot pairs for non-security digital assets would, under the bill’s approach, expect primary market-integrity oversight by the CFTC, with clear custody, surveillance, and conflicts-of-interest rules. If that same venue listed security tokens or offered broker-dealer-like services, SEC registration and disclosure duties would likely attach for those activities.

Token-issuer example: A team that sells a token with an expectation of profit from managerial efforts would face SEC jurisdiction for the offer and sale, including filing, disclosures, and ongoing reporting where required. If the token later trades on a compliant venue as a non-security commodity, secondary-market integrity and custody for those spot trades would sit with the CFTC.

Stablecoin and DeFi example: A wallet or platform that shares revenue from stablecoin reserves, or a DeFi protocol that routes stablecoin rewards to users, would be brought under explicit federal rules rather than inferred ones. The debate centers on guardrails, such as disclosures, reserve treatment, and consumer-harm controls, so that yield, if permitted, competes on transparent terms without undermining bank funding or evading securities laws.