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 clash threatens to derail the CLARITY Act before the 2026 midterms, leaving the US crypto regulatory framework incomplete at a critical moment.
Trump Takes Aim at Banks Over Stablecoin Yield Fight
In a Truth Social post on Tuesday, Trump said the GENIUS Act — the landmark stablecoin law he signed last July — “is being threatened and undermined by the Banks,” and called on Congress to pass market structure legislation immediately.
“Americans should earn more money on their money. The Banks are hitting record profits, and we are not going to allow them to undermine our powerful Crypto Agenda that will end up going to China, and other Countries if we don’t get The Clarity Act taken care of,” Trump wrote.
The statement marks the sharpest presidential intervention yet in 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 center of the conflict is a provision in the GENIUS Act that prohibits stablecoin issuers from paying interest directly to holders. However, the law does not explicitly prevent third-party platforms such as Coinbase and Kraken from passing yield on to users — a gap that banks have labeled a “loophole.”
This arrangement allows crypto exchanges to capture yield on reserve assets such as US Treasury bills and distribute it to customers, creating a competitive edge over traditional savings accounts that often pay as little as 0.01%.
Banking trade groups, led by the Bank Policy Institute, have warned that this structure could trigger deposit outflows of up to $6.6 trillion — a figure drawn from a US Treasury Department analysis. Bank of America CEO Brian Moynihan echoed the concern in January, stating that interest-bearing stablecoins could divert roughly 30–35% of all commercial bank deposits.
The banking lobby has pushed to close this gap through the CLARITY Act, the crypto market structure bill currently under Senate consideration. The bill would assign specific oversight roles to the SEC and CFTC, but has become a vehicle for the stablecoin yield debate.
Dimon Draws a Line
Trump’s post came on the same day that JPMorgan Chase CEO Jamie Dimon delivered pointed remarks on stablecoin regulation. Speaking on CNBC, Dimon argued that firms offering yield on stablecoin balances are functionally operating as banks and should be regulated accordingly.
Dimon suggested a compromise in which platforms could offer rewards tied to transactions rather than idle balances, but drew a firm line at interest-like payments on holdings. He cited capital requirements, FDIC insurance, anti-money-laundering obligations, and community lending mandates as standards that banks must meet — but that crypto firms currently do not.
However, Coinbase CEO Brian Armstrong has publicly rejected such framing. Armstrong predicted that banks would eventually reverse course and lobby for the ability to pay interest on stablecoins, once competitive pressure from digital assets becomes unavoidable.
A coalition of more than 125 crypto companies, including Coinbase, Gemini, and Kraken, launched a coordinated campaign against the banking lobby last year, arguing that reopening the GENIUS Act’s yield provisions would undermine the certainty that markets and innovators depend on.
Legislative Clock Is Ticking
The White House had set a tentative March 1 deadline for a deal between the two sides. That deadline passed without resolution. The CLARITY Act remains stuck in the Senate Banking Committee, with no markup date announced.
According to Elliptic’s regulatory analysis, the Senate Banking Committee had planned to vote on the bill in mid-January, but indefinitely postponed the session after Coinbase withdrew support over a proposed amendment restricting stablecoin rewards. Two White House meetings in early February failed to produce a compromise.
The OCC further complicated matters last week by publishing a 376-page proposed rulemaking under the GENIUS Act, with provisions that crypto insiders say could restrict how stablecoin issuers’ partners pay out rewards.
Senator Cynthia Lummis reposted Trump’s message, adding: “America can’t afford to wait. Congress must move quickly to pass the Clarity Act.”
With the 2026 midterm election cycle accelerating and a summer recess ahead, the legislative window is narrowing. If no deal emerges in the coming weeks, the US risks losing momentum on the crypto regulatory framework that both the White House and the industry view as critical to maintaining global competitiveness.
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