Regulations expected to fundamentally reshape the cryptocurrency market in the US are struggling to progress due to tensions between the banking sector and the crypto industry. US President Donald Trump directly intervened in the debate, harshly criticizing banks and calling on Congress to quickly pass legislation regulating the crypto market structure. In a post on the Truth Social platform, Trump specifically highlighted the debate surrounding stablecoin yields. Arguing that banks are delaying crypto legislation, Trump stated, “The US must complete market structure regulation as soon as possible. Americans should be able to get more out of their money.” The President also emphasized that banks are making record profits and said he would not allow delays in regulations for the crypto sector. According to Trump, this delay could weaken the US's competitiveness in the crypto space and lead to the sector shifting to other countries like China.
GENIUS Act and CLARITY Act at the center of the debate
Crypto regulations in the US are shaped around two important bills. The first, the GENIUS Act, aims to create a regulatory roadmap for stablecoin companies. This law, passed by Congress, aims to make the stablecoin market more transparent and regulated. However, the law prohibits stablecoin companies from directly paying interest or returns to users. On the other hand, third-party platforms such as crypto exchanges can offer returns to stablecoin holders. This is where the banking sector comes in.
Banking lobbies argue that this creates a "legal loophole." According to banks, stablecoins providing returns could cause deposits to shift from the traditional banking system to crypto platforms. Therefore, banks are demanding that stablecoin returns be completely banned in the broader crypto market structure law being discussed in the Senate.
The crypto sector opposes this proposal. Sector representatives argue that stablecoin returns are an important part of the DeFi and digital finance ecosystem. They also believe that such a ban would slow down innovation and could leave the US behind in global competition.
Trump: Banks shouldn't hold crypto laws hostage
Trump reacted harshly to these demands from banks in a post on Truth Social. Arguing that banks are trying to weaken the GENIUS Act, Trump stated:
“Banks should not be trying to undermine the GENIUS Act or hold the CLARITY Act hostage. They need to make a good deal with the crypto industry. This is in the best interest of the American people.”
Trump’s message further fueled the debate in Washington. It is known that the issue of stablecoin yields has been stalling the progress of the crypto bill in the Senate. In January, the withdrawal of support for the bill by Coinbase, a major crypto company, further complicated the process.
White House talks yield no results
In recent months, the White House has held several meetings bringing together the banking sector and crypto companies. The aim was to find common ground to move the bill forward. However, so far, no agreement has been reached between the parties.
JPMorgan CEO Jamie Dimon also recently argued that stablecoin yields should be regulated similarly to banking regulations. According to Dimon, “level playing fields” need to be created in the financial system.
On the other hand, some members of Congress believe the process could be accelerated. House Financial Services Committee Chair French Hill said that if the Senate fails to make progress on its own bill, it could directly address the CLARITY Act text passed by the House of Representatives. Republican Senator Cynthia Lummis also supported Trump's message, stating that Congress needs to act quickly. According to Lummis, regulations must be implemented without delay to maintain the US leadership in the crypto space.
