President Donald Trump has thrown his support behind crypto firms in their high-stakes battle with U.S. banks over whether they can offer interest-like returns on stablecoins. Trump, in a social media post late Tuesday, ratcheted up pressure on banks to relent on the stablecoin yield issue. The Genius Act is being threatened and undermined by the Banks, and that is unacceptable, Trump said in his post. They need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People.
The president, whose family has interests in the crypto industry, has hosted a series of White House meetings between the two sides in hopes of brokering a deal, but the banks haven’t relented. The dispute between the industries centers on whether crypto firms like Coinbase can offer yields on stablecoins. While crypto companies see it as a consumer-friendly innovation that will let people earn money on their idle funds, banks have warned that the competing product could siphon trillions of dollars from their industry. Executives from JPMorgan Chase and Bank of America, the two largest American banks by assets, have cited a Treasury study that indicated that banks could lose up to $6.6 trillion in deposits if stablecoins offered a yield.
It can’t be, you have these people doing one thing without any regulation, and these people doing another, JPMorgan Chase CEO Jamie Dimon told CNBC’s Leslie Picker on Monday. If you do that, the public will pay. It will get bad. Now, he is explicitly putting his weight behind crypto. That’s the key point of contention holding up passage in Congress of the Clarity Act, which is a companion bill to the Genius Act approved last year, setting up a framework for regulated stablecoins.
President Donald Trump voiced support for crypto firms in the high-stakes battle with U.S. banks over whether stablecoins can offer interest-like yields. In a late Tuesday post, he pressed banks to concede on the yield issue and argued that the Genius Act is being threatened by the banks, which he called unacceptable. Trump has hosted White House meetings between the crypto industry and banks to broker a deal, but lenders have not yielded. The core dispute centers on whether firms like Coinbase can offer yields on stablecoins.
Crypto companies view this as a consumer-friendly enhancement that would allow people to earn money on idle funds, while banks warn the product could siphon trillions from the industry. Executives from JPMorgan Chase and Bank of America have cited a Treasury study indicating banks could lose up to $6.6 trillion in deposits if stablecoins offered a yield. JPMorgan Chase CEO Jamie Dimon told CNBC that such divergence without regulation would harm the public. Trump said Americans should earn money on their money, emphasizing that this industry cannot be taken from the American people as it nears broader adoption.
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