Former US President Donald Trump has publicly endorsed cryptocurrency firms, positioning them against major banks in a high-stakes conflict over whether these companies can offer interest-like returns on stablecoins. Trump intensified pressure on the banking sector through a social media post on Tuesday night, demanding concessions on the issue of stablecoin yields. "The Genius Act is being threatened and undermined by banks—this is unacceptable," Trump stated in his post. "Banks must reach a proper agreement with the crypto industry; it is in the best interest of the American people." Trump and his family maintain financial interests in the cryptocurrency sector. He has hosted multiple meetings at the White House in an effort to broker a resolution, but banks have so far remained unwilling to compromise.
The central dispute revolves around whether cryptocurrency companies, such as Coinbase Global, Inc., can provide returns on stablecoins. Crypto advocates describe this as an innovative service that allows individuals to earn on idle funds. However, banks warn that such competitive offerings could draw trillions of dollars away from the traditional banking system. Executives from JPMorgan Chase and Bank of America, two of the largest U.S. banks by assets, have cited a Treasury Department study indicating that if stablecoins were to offer yields, bank deposits could decline by as much as $6.6 trillion. This outflow could destabilize some banks, particularly smaller and mid-sized institutions, and reduce a critical source of funding for business loans across the country. "We cannot have a situation where one group operates without regulation while another is heavily regulated," JPMorgan Chase CEO Jamie Dimon said in a Monday interview with CNBC's Leslie Picker. "If that happens, the public will ultimately pay the price, and the situation will become very problematic."
On Wednesday morning, shares of Coinbase Global, Inc. surged by as much as 11%, while shares of JPMorgan Chase and Bank of America each fell by less than 1%. Although Trump’s support could influence fellow Republicans who control Congress, it remains uncertain whether his endorsement will secure the passage of related legislation. His stance has also raised renewed questions about potential conflicts of interest, as reports indicate Trump and his family have profited by hundreds of millions of dollars from various enterprises, including the crypto platform World Free Financial. According to individuals familiar with the matter, Trump has presided over several meetings between the two sides at the White House in recent months in an attempt to facilitate an agreement, but banks have not relented. He has now clearly aligned himself with the crypto industry. "Americans deserve to let their money work for them," Trump wrote. "This industry is on the verge of major success and must not be taken away from the American people."
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