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 Goal at Banks Over Stablecoin Yield Combat
In a Fact Social submit on Tuesday, Trump stated the GENIUS Act — the landmark stablecoin legislation he signed final July — “is being threatened and undermined by the Banks,” and referred to as on Congress to go market construction laws instantly.
“Individuals ought to earn extra money on their cash. The Banks are hitting report income, and we aren’t going to permit them to undermine our highly effective Crypto Agenda that can find yourself going to China, and different International locations if we don’t get The Readability 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
On the heart of the battle is a provision within the GENIUS Act that prohibits stablecoin issuers from paying curiosity on to holders. Nonetheless, the legislation doesn’t explicitly stop third-party platforms equivalent to Coinbase and Kraken from passing yield on to customers — a niche that banks have labeled a “loophole.”
This association permits crypto exchanges to seize yield on reserve belongings equivalent to US Treasury payments and distribute it to clients, making a aggressive edge over conventional financial savings accounts that always pay as little as 0.01%.
Banking commerce teams, led by the Financial institution Coverage 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 Division evaluation. Financial institution of America CEO Brian Moynihan echoed the priority in January, stating that interest-bearing stablecoins may divert roughly 30–35% of all industrial financial institution deposits.
The banking foyer has pushed to shut this hole by means of the CLARITY Act, the crypto market construction invoice presently beneath Senate consideration. The invoice would assign particular oversight roles to the SEC and CFTC, however has change into a car for the stablecoin yield debate.
Dimon Attracts a Line
Trump’s submit got here on the identical day that JPMorgan Chase CEO Jamie Dimon delivered pointed remarks on stablecoin regulation. Talking on CNBC, Dimon argued that corporations providing yield on stablecoin balances are functionally working as banks and ought to be regulated accordingly.
Dimon urged a compromise by which platforms may provide rewards tied to transactions moderately 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 group lending mandates as requirements that banks should meet — however that crypto corporations presently don’t.
Nonetheless, 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 stress from digital belongings turns into unavoidable.
A coalition of greater than 125 crypto firms, together with Coinbase, Gemini, and Kraken, launched a coordinated marketing campaign towards the banking foyer final 12 months, arguing that reopening the GENIUS Act’s yield provisions would undermine the understanding that markets and innovators rely upon.
Legislative Clock Is Ticking
The White Home had set a tentative March 1 deadline for a deal between the 2 sides. That deadline handed with out decision. The CLARITY Act stays caught within the Senate Banking Committee, with no markup date introduced.
Based on Elliptic’s regulatory evaluation, 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 Home conferences in early February failed to supply a compromise.
The OCC additional sophisticated issues final week by publishing a 376-page proposed rulemaking beneath the GENIUS Act, with provisions that crypto insiders say may limit how stablecoin issuers’ companions pay out rewards.
Senator Cynthia Lummis reposted Trump’s message, including: “America can’t afford to attend. Congress should transfer shortly to go the Readability Act.”
With the 2026 midterm election cycle accelerating and a summer season recess forward, the legislative window is narrowing. If no deal emerges within the coming weeks, the US dangers dropping momentum on the crypto regulatory framework that each the White Home and the business view as important to sustaining world competitiveness.