Key Highlights
- U.S. lawmakers and crypto leaders gather for DC Blockchain Week as negotiations over the CLARITY Act intensify.
- A potential compromise on stablecoin yield rules could unlock progress on the stalled crypto market structure bill.
- Custodia Bank loses its Fed master account case again, but dissenting judges raise the chances of a Supreme Court appeal.
Washington is gearing up for what could be the most consequential crypto policy week of the year, as DC Blockchain Week kicks off today with lawmakers, regulators, and industry leaders converging for the Digital Chamber’s DC Blockchain Summit on Tuesday and Wednesday.
At the center of this week’s action: a stablecoin yield deal that has been the single biggest obstacle to advancing the Digital Asset Market Clarity Act (CLARITY Act) through the Senate.
Stablecoin yield: “Very Close” to a deal
The headline question heading into the summit is whether Senate Banking Committee Chair Tim Scott (R-SC) will signal a timeline for the next committee markup. Scott is scheduled to kick off the DC Blockchain Summit on Tuesday in a fireside chat, and attendees expect him to face direct questions about when the committee will reconvene.
According to Crypto in America, Digital Chamber CEO Cody Carbone believes the ongoing negotiations between the crypto industry and banks are approaching a conclusion. The emerging compromise reportedly centers on banning yield on idle stablecoin balances while allowing transaction-based rewards.
“They’re getting closer and closer to a deal, so I feel very confident we can reach a resolution in the next week,” Carbone told Crypto in America on Friday.
That said, several moving parts remain. Senators Thom Tillis (R-NC) and Angela Alsobrooks (D-MD) have emerged as key gatekeepers in the yield talks. Both have been sympathetic to banking industry concerns about potential deposit flight if crypto firms are allowed to offer high-yield alternatives to traditional savings accounts. Sources say once Tillis and Alsobrooks are satisfied with the legislative language, the remaining issues around DeFi and token classification can be wrapped up.
As The Crypto Times previously reported, Alsobrooks told over 1,400 community bankers at the ABA Washington Summit on March 10 that everyone involved in the CLARITY Act negotiations should prepare to walk away “a little bit unhappy,” framing the bipartisan work with Tillis as a pragmatic effort to balance deposit protection with crypto innovation.
While Tillis will not attend the summit, Alsobrooks is expected to address the latest yield developments in her speech on Wednesday.
For context, the stablecoin yield debate has stalled the CLARITY Act since January, when the Senate Banking Committee pulled a scheduled markup at the last moment. Multiple White House-led meetings between crypto executives, banking representatives, and lawmakers have followed, with the talks described as “productive” but so far without a final agreement. Coinbase withdrew its support for the bill earlier this year after amendments by Tillis and Alsobrooks restricted stablecoin reward provisions.
Custodia bank loses again — but Supreme Court may be next
In a separate but equally significant development, the 10th Circuit Court of Appeals on Friday rejected Custodia Bank’s request for a full court rehearing in its fight to obtain a Federal Reserve master account.
Active judges voted 7–3 against rehearing the case, effectively exhausting the Wyoming crypto bank’s options in the lower courts. The decision upholds an October split ruling (2-1) that found the Fed’s reserve banks have legal discretion to deny master accounts.
As Eleanor Terrett reported, Friday’s decision is notable for two reasons.
First, two of the judges who voted against Custodia — Obama appointees Robert Bacharach and Nancy Moritz — appeared to contradict their own reasoning in the 2017 cannabis banking case, Fourth Corner Credit Union v. Federal Reserve.
In that case, Bacharach had written that federal law unambiguously entitles eligible depository institutions to a master account, while Moritz noted that without one, a bank is essentially just “a vault.”
Second, the ruling leaves the door open for a Supreme Court appeal. In a written dissent, Judges Timothy Tymkovich and Allison Eid warned that the ruling gives Reserve Banks “unreviewable discretion” to deny accounts to state-chartered banks in direct contravention of the Monetary Control Act of 1980. Judge Harris Hartz also voted in favor of rehearing.
Having three dissenting judges reportedly gives the case a higher-than-average chance of getting the Supreme Court’s attention, though the court only takes about 1% of petitions filed annually. The procedural path is not entirely unlike Corner Post v. Federal Reserve, the last case involving the Fed as a defendant to reach the high court in 2024.
This comes just days after the same Kansas City Fed that rejected Custodia granted Kraken Financial a limited “skinny” master account — the first ever issued to a crypto-native company — creating a strange situation where Custodia, which fought longest, got nothing, while Kraken, which came later, got a version of what Custodia wanted.
Custodia did not respond to a request for comment by press time.
What else to watch this week
This week is packed with major appearances and data releases that could move crypto markets.
Monday: The House and Senate are back in session. Senators Steve Daines (R-MT), Cynthia Lummis (R-WY), and Congressman Mike Carey (R-OH) are hosting a joint roundtable on crypto tax at 4:00 p.m. Meanwhile, ETHDC kicks off at Pubkey, bringing together builders, VCs, and policy voices.
Tuesday: Day 1 of the DC Blockchain Summit opens with Tim Scott’s fireside chat (10:40 a.m.), followed by Comptroller of the Currency Jonathan Gould (11:10 a.m.). A panel featuring House Agriculture Committee Chairman GT Thompson (R-PA) and Rep. Dusty Johnson (R-SD) is set for 2:55 p.m. The day wraps with keynote speeches from CFTC Chairman Michael Selig (3:50 p.m.) and SEC Chairman Paul Atkins (4:00 p.m.).
Wednesday: FDIC Chair Travis Hill opens Day 2 in a fireside chat (8:30 a.m.), followed by Binance founder CZ discussing his new book “Freedom of Money” (9:25 a.m.). SEC Commissioner Hester Peirce (1:55 p.m.) and White House Crypto Council Executive Director Patrick Witt (2:55 p.m.) are also set to speak.
Multiple senators and representatives are slated to appear, including Hagerty, Lummis, Gillibrand, Alsobrooks, Britt, Daines, Husted, Emmer, Steil, Donalds, Miller, and Horsford. The Federal Reserve announces its next interest rate decision at 2:00 p.m., with Chair Jerome Powell’s press conference at 2:30 p.m.
Thursday: The Federal Reserve holds an open board meeting on potential changes to bank capital requirements. The FDIC is meeting on the same topic at the same time. Gemini reports earnings after the closing bell.
What this means going forward
This week could set the tone for whether the CLARITY Act makes it to a Senate vote before midterm election dynamics narrow the legislative window. If Carbone’s optimism holds and a stablecoin yield deal materialises within the week, the Senate Banking Committee could schedule a markup as early as late March. If it doesn’t, the bill risks slipping further into political uncertainty.
On the Custodia front, a potential Supreme Court petition would be a long shot — but with three dissenting circuit judges, a contradictory legal trail from the same bench, and growing Congressional attention on Fed master account policies, the case carries more weight than the average cert petition.
Between the yield talks, the summit speeches, and the Fed’s rate decision on Wednesday, Washington has a lot of crypto ground to cover this week — and the industry will be watching every move.
Also Read: US Senator Drops Truth Bomb on CLARITY Act: Banks Must Compromise
