Trump Says Banks Are Threatening Crypto: 2 Things Investors Need To Know
Written by
Lydia Kibet
Edited by
Jenna Klaverweiden
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President Donald Trump recently accused major U.S. banks of trying to undermine crypto legislation governing digital assets. He warned that he would not allow financial institutions to sabotage his crypto agenda of making America the “Crypto Capital of the World.”
“The Genius Act is being threatened and undermined by the Banks, and that is unacceptable — We are not going to allow it,” he said in a social media post. “The U.S. needs to get Market Structure done, ASAP.”
His main concern is that Americans should be generating more money from their money, not the banks trying to “undercut the Genius Act, or hold the Clarity Act hostage.” In the post, Trump claimed they needed to “make a good deal with the crypto industry because that’s what’s in the best interest of the American people.” So what does this mean for investors?
Also see five Trump policy impacts likely to hit your 2026 holdings.
Banks Could Have Real Economic Concerns
One issue revolves around stablecoin yields. “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 said.
Under the Genius Act, signed into law last July, stablecoin issuers are generally prohibited from passing yield to users. However, the law doesn’t prohibit third-party exchanges like Coinbase from distributing yields.
Many traditional financial institutions want Congress to ban or restrict the stablecoin law, saying that this could make consumers draw deposits from conventional savings accounts. As reported by Crypto News, $6 trillion worth of bank deposits could move into stablecoins, and banks have warned that “yield-bearing stablecoins could drain deposits and limit lending.”
“Allowing stablecoin yield would create unfair competition with insured deposits and therefore distort the market. They would put banks at a systematic disadvantage against crypto companies,” said Igor Pejic, a tech investing strategist.
Pejic added that the risk goes beyond competition. “Even allowing limited yields risks massive deposit flight, eroding Main Street lending capacity and potentially choking off economic growth,” he said.
Global Regulations Are Not Necessarily More Permissive
Trump noted that the Genius Act was the first step to make the U.S. the “Crypto Capital of the World,” and the passage of the Clarity Act could complete the job and keep the crypto industry in the country. “This industry cannot be taken from the people of America when it is so close to becoming truly successful,” he said.
Regardless of the concerns of the Clarity Act potentially losing crypto power to other countries, Pejic said the global regulatory environment may not be significantly easier. “The fears of the crypto industry leaving the U.S. are overblown. No other large economic bloc has a more permissive regulation. Yields for stablecoin issuers are banned in the EU and the UK, and in China stablecoins are banned altogether,” he said.
Pejic noted that many digital asset firms still value the U.S. market because of its access to capital and regulatory clarity.
Editor’s note on political coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
This article is for informational purposes only and does not constitute financial advice. Investing involves risk, including the possible loss of principal. Always consider your individual circumstances and consult with a qualified financial advisor before making investment decisions.
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