US President Trump escalates confrontation with banks over crypto agenda

By Olga Kharif

 

President Donald Trump warned banks against weakening his cryptocurrency agenda and pushed for passage of a market-structure bill known as the Clarity Act, escalating a confrontation with the financial industry over legislation that would reshape how digital assets are regulated in the US. 

 

In a post on his Truth Social platform late Tuesday, Trump framed the fight in geopolitical terms, saying the crypto industry “cannot be taken from the People of America” and that inaction would cede ground to China. 

 

“The Banks are hitting record profits, and we are not going to allow them to undermine our powerful Crypto Agenda,” Trump said.

 

It was his most direct public rebuke of the banking lobby on crypto policy, and comes as the administration pushes to establish the US the world’s capital for digital assets.

 

The Clarity Act legislation passed the House last year but has stalled in the Senate, where competing committee drafts have yet to be reconciled. A Banking Committee markup was postponed after Coinbase Global Inc., the largest US crypto exchange, withdrew its support. 

 

Banks oppose provisions that would allow firms like crypto exchanges to pay yield to users holding stablecoins, arguing it could result in deposit flight.

 

The Genius Act, which Trump signed into law in July, created the first comprehensive US regulatory framework for US dollar-based stablecoins, requiring issuers to back tokens one-for-one with dollars or other liquid assets. The law bars stablecoin issuers from paying yield to holders but is silent on whether exchanges or other intermediaries could do so.

 

Ever since, banks have been lobbying to include language in the Clarity Act to prohibit exchanges like Coinbase from offering stablecoin yield to customers. The crypto industry has argued that it’s simply offering more value to consumers, an argument Trump agreed with, posting: “Americans should earn more money on their money.” 

Stalemate 

While representatives of the banking and the crypto industries have met several times at the White House in recent weeks to try to come up with bill language that would appease both sides, a compromise has been elusive.

 

“The Genius Act is being threatened and undermined by the Banks, and that is unacceptable — We are not going to allow it,” Trump said on Truth Social. “The U.S. needs to get Market Structure done, ASAP.”

 

Trump is known as the US’s first pro-crypto president. The sector has contributed heavily to his election campaign and inauguration. Its big war chest of funds may also be important in the midterm elections later this year.

 

Trump’s own family has dramatically expanded its business empire into crypto. World Liberty Financial, co-founded by the president, launched its own stablecoin last year. The family is also involved in Bitcoin mining and other crypto ventures.

 

Trump family members often speak about having been debanked in the past — a move that sent them into exploring crypto.

 

“The Banks should not be trying to undercut The Genius Act, or hold The Clarity Act hostage,” Trump wrote. “They need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People.”