Key Takeaways
- President Trump used Truth Social to criticize banking institutions, claiming they are sabotaging the GENIUS Act stablecoin legislation
- The dispute revolves around allowing third-party services to provide yield returns on customer-held stablecoins
- Banking institutions warn that permitting stablecoin yields could lead to mass withdrawal of deposits from traditional banks
- Following Coinbase’s withdrawal of support, the Senate Banking Committee delayed its January markup session
- House Financial Services Committee Chair French Hill proposed the Senate adopt the House version of the CLARITY Act
In a Truth Social post on Tuesday, Trump launched a direct attack against the banking industry for obstructing cryptocurrency regulation.
The President claimed financial institutions are threatening the GENIUS Act — stablecoin legislation he enacted last July — while attempting to derail the CLARITY Act, a comprehensive crypto market structure proposal currently in limbo within the Senate.
“The Banks are hitting record profits, and we are not going to allow them to undermine our powerful Crypto Agenda,” Trump declared.
The GENIUS Act establishes a regulatory framework for stablecoins while prohibiting issuers from offering direct yield payments to token holders. Nevertheless, intermediary platforms such as cryptocurrency exchanges maintain the ability to provide yield offerings to their customers.
Banking institutions demand this provision be eliminated. Their position is that permitting platforms like Coinbase to deliver stablecoin yield products threatens to siphon deposits from conventional banking systems.
Cryptocurrency firms and their advocacy groups have mounted fierce opposition to any prohibition on yield offerings.
The withdrawal of Coinbase’s endorsement for the Senate legislation in January over this very matter caused the Senate Banking Committee to delay a planned markup session indefinitely.
Obstacles Preventing Legislative Progress
The White House has facilitated no fewer than three negotiation sessions this year between banking sector representatives and cryptocurrency industry stakeholders to hammer out acceptable bill language.
An informal White House target date of late February came and went without consensus.
Reports indicate that draft text is being circulated among congressional members, though no formal agreement has been made public.
Time is running short in the Senate. The summer break looms ahead, while the 2026 midterm campaign season gains momentum.
French Hill’s Position
During a separate Tuesday appearance, House Financial Services Committee Chair French Hill offered his perspective.
He noted the CLARITY Act, which secured House passage with support from 78 Democratic members, already establishes that stablecoins function as payment instruments rather than investment vehicles and should not generate direct interest payments.
Hill suggested the Senate simply adopt the House version’s language if internal negotiations fail.
“If the Senate can’t come to a straightforward conclusion here, I recommend they use the language that we have in the House-passed Clarity Act,” Hill stated.
Trump additionally mentioned World Liberty Financial, a company with ties to his family that issues its own stablecoin named USD1.
Last week, the Office of the Comptroller of the Currency released a proposed regulation stipulating that agreements between stablecoin issuers and third-party affiliates must explicitly outline the services those third parties provide — though it avoided imposing an outright ban on yield payments.
Trump’s statement followed multiple days during which his attention centered on U.S. military operations against Iran, which have caused disruptions to aviation and maritime commerce throughout the Middle East.
