U.S. President Donald Trump boards Air Force One on its way back to Washington, D.C., before departing from Palm Beach International Airport in West Palm Beach, Florida, on March 1, 2026.
Mandel Gunn | AFP | Getty Images
President Donald Trump is backing crypto companies in a high-stakes battle with U.S. banks over whether they can provide interest-worthy returns on stablecoins.
President Trump ratcheted up the pressure on banks to ease the stablecoin yield issue in social media posts late Tuesday.
This is the main issue blocking Congress from passing the Clarity Act, a companion bill to the Genius Act approved last year that would establish a regulated stablecoin framework.
“The Genius Act has been threatened and undermined by the banks, and this is unacceptable,” President Trump said in the post. “They need to make a good deal with the crypto industry because that is in the best interest of the American people.”
Coinbase stock rose as much as 11% in early trading Wednesday, while JPMorgan Chase and Bank of America shares fell less than 1%.
Trump’s decision to support the cryptocurrency industry could sway Republicans in the Republican-led Congress, but it is unclear whether his support will be enough to ensure passage of the bill. The move also raises new questions about potential conflicts of interest, as the president and his family have reportedly generated hundreds of millions of dollars in wealth from interests in companies such as cryptocurrency platform World Liberty Financial.
The industry debate has focused on whether crypto companies like Coinbase can offer stablecoin yields. Cryptocurrency companies see it as a consumer-friendly innovation that allows people to make money with idle funds, but banks warn that competing products could siphon trillions of dollars from the industry.
A $6.6 trillion threat?
Executives at JPMorgan and Bank of America, the two largest U.S. financial institutions by assets, cited a Treasury Department study showing that banks could lose up to $6.6 trillion in deposits if stablecoins had yields.
That could destabilize some banks, especially smaller ones, and eliminate sources of financing for businesses across the country.
Banks argue that allowing the poorly regulated crypto industry to act like quasi-banks could increase systemic risk. Cryptocurrency companies argue that risks are contained and that stablecoins backed by U.S. Treasuries will drive demand for U.S. Treasuries.
“That can’t happen,” JPMorgan CEO Jamie Dimon told CNBC’s Leslie Picker on Monday. “You have people doing one thing and doing another thing without regulation.” “If we do that, the people will have to pay. It will be a big problem.”
The president has hosted a series of meetings between the two sides at the White House in recent months in an attempt to broker a deal, but the banks remained steadfast, according to people familiar with the meetings.
Currently, he has a clear focus on cryptocurrencies.
“Americans should earn money with their own money,” Trump said in the post. “This industry is so close to true success that we cannot take it away from the American people.”
Coinbase CEO
This phrase is similar to one used by Coinbase CEO Brian Armstrong in an interview. Coinbase is the largest crypto platform in the United States, offering yield to its members through what banking industry critics call “loopholes” in current regulations.
Mr. Armstrong, who is seen by the bank as the main adversary in the dispute, met with President Trump at the White House shortly before Tuesday’s social media post, according to a person familiar with the meeting. The details were first reported by Politico.
Both banks and crypto companies have reasons to support the passage of transparency laws, but given the differences in opinion, it is unclear whether it will happen. Earlier this year, President Trump tried to pressure banks to cap credit card interest rates, but the industry had enough support from both Republicans and Democrats to fend off that threat.
Tensions between Mr. Armstrong and bank CEOs have been high since Coinbase’s CEO publicly criticized banks for opposing stablecoin yields.
“I’m full of st,” Dimon reportedly told Armstrong during a chance interaction at the World Economic Forum in Davos, Switzerland, in January.
