Former President Donald Trump has publicly backed cryptocurrency firms in their ongoing confrontation with U.S. banks regarding the provision of interest-like returns on stablecoins. In a social media post on Tuesday, the former president intensified pressure on banks to transition on this critical issue, which has stalled the passage of the Clarity Act. This Act is a companion to last year’s Genius Act, aimed at establishing a regulatory framework for stablecoins.
Trump’s assertion that “the Genius Act is being threatened and undermined by the banks, and that is unacceptable” underscores the friction between traditional financial institutions and the burgeoning crypto sector. He added, “They need to make a good deal with the Crypto Industry because that’s what’s in the best interest of the American People.”
In the wake of Trump’s endorsement, shares of Coinbase, a leading U.S. cryptocurrency exchange, surged by as much as 13% in early trading on Wednesday, whereas major banks like JPMorgan Chase and Bank of America saw their stocks dip by less than 1%. While Trump’s support could resonate with GOP members in Congress, questions linger about its effectiveness in ensuring the bill’s passage. Additionally, issues of potential conflicts of interest arise, given reports of substantial financial gains made by Trump and his family from investments in firms like World Liberty Financial, a crypto platform.
The heart of this dispute lies in whether crypto companies like Coinbase can legally offer yields on stablecoins. Industry advocates argue that this innovation can benefit consumers by allowing them to earn returns on idle funds. Conversely, banks warn that such offerings could threaten their financial stability, potentially resulting in withdrawal of up to $6.6 trillion in deposits as indicated by a Treasury study. Such a shift poses a risk to smaller banks and could disrupt the loan dynamics essential for businesses nationwide.
JPMorgan CEO Jamie Dimon has voiced concerns that permitting less-regulated crypto entities to operate like quasi-banks could increase systemic risk. “If you do that, the public will pay. It will get bad,” he warned in an interview. Despite overtures from Trump, seeking to mediate between the two factions through White House meetings, banks have remained steadfast in their opposition.
In his post, Trump emphasized the necessity for Americans to “earn money on their money,” framing the issue as one of accessibility for the public-the sentiment echoing similar rhetoric by Coinbase CEO Brian Armstrong who has criticized banks for exploiting regulatory loopholes. Armstrong recently met with Trump prior to the former president’s social media commentary, a detail previously reported by Politico.
Both banks and cryptocurrency firms share a stake in the swift passage of the Clarity Act, yet friction persists over differing priorities. Earlier this year, Trump attempted to persuade banks to impose limits on credit card interest rates, but his efforts ultimately fell short against bipartisan support for the banking industry.
As tensions mounted between Armstrong and banking leaders, reports emerged of Dimon calling Armstrong “full of s–t” during an impromptu interaction at the World Economic Forum in Davos, Switzerland, further highlighting the contentious atmosphere surrounding this pivotal issue.
In summary, Trump’s alignment with the crypto industry not only aligns him with a growing financial movement but also raises notable implications regarding regulatory frameworks, consumer accessibility, and the potential reshaping of financial landscapes in the U.S. as the Clarity Act awaits its legislative fate.
Original Source: https://www.cnbc.com/2026/03/04/trump-crypto-banks-stablecoin-yield.html
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Publish Date: 2026-03-04 21:13:00
