Trump Attacks Banks Over Stablecoin Yield, Clarity Act Standoff
President Donald Trump accused US banks of threatening the GENIUS Act and holding the CLARITY Act hostage, escalating a months-long standoff between the banking and crypto industries over stablecoin yield.
The conflict threatens to derail the CLARITY Act earlier than the 2026 midterms, leaving the US crypto regulatory framework incomplete at a important second.
Trump Takes Aim at Banks Over Stablecoin Yield Fight
In a Truth Social post on Tuesday, Trump stated the GENIUS Act — the landmark stablecoin regulation he signed final July — “is being threatened and undermined by the Banks,” and known as on Congress to go market construction laws instantly.
“Americans ought to earn extra money on their cash. The Banks are hitting report earnings, and we’re not going to permit them to undermine our highly effective Crypto Agenda that can find yourself going to China, and different Countries if we don’t get The Clarity Act taken care of,” Trump wrote.
The assertion marks the sharpest presidential intervention but within the legislative battle over stablecoin rewards — a dispute that has stalled the broader crypto regulatory agenda in Washington.
Stablecoin Yield: The Core Dispute
At the middle of the battle is a provision within the GENIUS Act that prohibits stablecoin issuers from paying curiosity on to holders. However, the regulation doesn’t explicitly stop third-party platforms similar to Coinbase and Kraken from passing yield on to customers — a niche that banks have labeled a “loophole.”
This association allows crypto exchanges to capture yield on reserve property similar to US Treasury payments and distribute it to prospects, making a aggressive edge over conventional financial savings accounts that usually pay as little as 0.01%.
Banking commerce teams, led by the Bank Policy Institute, have warned that this construction may set off deposit outflows of as much as $6.6 trillion — a determine drawn from a US Treasury Department evaluation. Bank of America CEO Brian Moynihan echoed the priority in January, stating that interest-bearing stablecoins may divert roughly 30–35% of all business financial institution deposits.
The banking foyer has pushed to shut this hole by the CLARITY Act, the crypto market construction invoice at the moment underneath Senate consideration. The invoice would assign particular oversight roles to the SEC and CFTC, however has grow to be a car for the stablecoin yield debate.
Dimon Draws a Line
Trump’s submit got here on the identical day that JPMorgan Chase CEO Jamie Dimon delivered pointed remarks on stablecoin regulation. Speaking on CNBC, Dimon argued that companies providing yield on stablecoin balances are functionally working as banks and ought to be regulated accordingly.
Dimon advised a compromise wherein platforms may provide rewards tied to transactions fairly than idle balances, however drew a agency line at interest-like funds on holdings. He cited capital necessities, FDIC insurance coverage, anti-money-laundering obligations, and neighborhood lending mandates as requirements that banks should meet — however that crypto companies at the moment don’t.
However, Coinbase CEO Brian Armstrong has publicly rejected such framing. Armstrong predicted that banks would ultimately reverse course and foyer for the power to pay curiosity on stablecoins, as soon as aggressive strain from digital property turns into unavoidable.
A coalition of greater than 125 crypto firms, together with Coinbase, Gemini, and Kraken, launched a coordinated campaign in opposition to the banking foyer final 12 months, arguing that reopening the GENIUS Act’s yield provisions would undermine the understanding that markets and innovators depend upon.
Legislative Clock Is Ticking
The White House had set a tentative March 1 deadline for a deal between the 2 sides. That deadline passed without resolution. The CLARITY Act stays caught within the Senate Banking Committee, with no markup date introduced.
According to Elliptic’s regulatory analysis, the Senate Banking Committee had deliberate to vote on the invoice in mid-January, however indefinitely postponed the session after Coinbase withdrew help over a proposed modification limiting stablecoin rewards. Two White House conferences in early February failed to provide a compromise.
The OCC additional difficult issues final week by publishing a 376-page proposed rulemaking underneath the GENIUS Act, with provisions that crypto insiders say may prohibit how stablecoin issuers’ companions pay out rewards.
Senator Cynthia Lummis reposted Trump’s message, including: “America can’t afford to attend. Congress should transfer rapidly to go the Clarity Act.”
With the 2026 midterm election cycle accelerating and a summer time recess forward, the legislative window is narrowing. If no deal emerges within the coming weeks, the US dangers shedding momentum on the crypto regulatory framework that each the White House and the business view as important to sustaining international competitiveness.
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