U.S. President Donald Trump boards Air Force One before departing Palm Beach International Airport in West Palm Beach, Florida, March 1, 2026, on his way back to Washington, DC.
Mandel Ngan | Afp | Getty Images
President Donald Trump has thrown his support behind crypto companies 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 Tuesday evening, stepped up pressure on banks to back down on the issue of stablecoin yield.
This is the main point of contention preventing Congress from passing the Clarity Act, which is a companion bill to the Genius Act approved last year, establishing a framework for regulated stablecoins.
“The Genius Act is being threatened and undermined by the banks, and it is unacceptable,” Trump said in his message. “They need to make a good deal with the crypto industry because that’s what’s in the best interest of the American people.”
Coinbase shares jumped 15% midday Wednesday, while shares of JPMorgan Chase And Bank of America fell less than 1%.
Although Trump’s decision to support the crypto industry may influence his Republican Party’s members in the GOP-led Congress, it is unclear whether his support is enough to ensure the bill’s passage. The move also raises new questions about possible conflicts of interest, as the president and his family reportedly generated hundreds of millions of dollars in wealth through interests in companies including crypto platform World Liberty Financial.
The dispute between the industries is over whether crypto companies like Coinbase can offer returns on stablecoins. While crypto companies see it as a user-friendly innovation that will allow people to make money on their idle funds, banks have warned that the rival product could siphon billions of dollars from their industry.
A $6.6 trillion threat?
Executives at JPMorgan and Bank of America, the two largest U.S. lenders by assets, cited a Treasury study that found banks could lose up to $6.6 trillion in deposits if stablecoins offered a return.
This could destabilize some banks, particularly smaller ones, and remove a source of funding for business lending across the country.
Banks say allowing the less regulated crypto industry to behave like quasi-banks could increase systemic risk. Crypto companies say risks are under control and stablecoins backed by Treasuries will boost demand for U.S. debt.
“It’s not possible, these people are doing one thing without any regulation, and these people are doing another thing,” JPMorgan CEO Jamie Dimon told CNBC’s Leslie Picker on Monday. “If you do this, the public will pay. Things will get worse.”
In recent months, the president has held a series of White House meetings between the two sides in hopes of reaching an agreement, but the banks have not relented, according to people with knowledge of those meetings.
Now he is explicitly putting his weight behind crypto.
“Americans should make money with their money,” Trump said in his message. “This industry cannot be taken away from the American people when it is so close to becoming a true success.”
“Full of shit”
This wording is similar to language used by Coinbase CEO Brian Armstrong in interviews. Coinbase is the largest U.S. crypto exchange and is offering yield to its members through what banking industry critics call a “loophole” in current regulations.
Armstrong, seen by the banks as their main adversary in this dispute, met with Trump at the White House shortly before the president’s social media post Tuesday, according to a person with knowledge of the meeting. This detail was reported earlier by Politico.
Banks and crypto companies have reason to support passage of the Clarity Act, but it is unclear whether this will happen, given the disagreement. Earlier this year, Trump tried to pressure banks to cap credit card interest rates, but the industry had enough support among Republicans and Democrats to stave off that threat.
Tensions between Armstrong and banking CEOs have escalated since the Coinbase CEO publicly called out banks for their opposition to stablecoin returns.
In January, Dimon allegedly told Armstrong he was “full of crap” during a chance interaction at the World Economic Forum in Davos, Switzerland.