Trump Slams Banks Over Stablecoin Dispute, Says They’re Undermining GENIUS Act

Highlights:

• Trump slams banks for delaying the passage of GENIUS Act for stablecoin regulation.
• The US president warned that if the delay persists, crypto growth could shift to other regions like China.
• Banks argued that the new bill contains a loophole that creates unfair market competition. 

The United States President, Donald Trump, has called out major banks for deliberately trying to delay and weaken the stablecoin law that he signed last year. In a recent post on Truth Social, the US president said banks are putting pressure on lawmakers to delay the new crypto legislation that is still debated in the Senate. Notably, the GENIUS Act, which sets regulations for stablecoins, is at the centre of the US president’s outburst. 

President Trump wrote:

For context, a section of the GENIUS Act stipulated that stablecoin issuers would no longer pay interest to the coin holders. After the bill became law, banks argued that the rule had a gap. They claimed it allows outside companies to offer rewards to stablecoin users. They argued that this setup creates unfair competition.

Consequently, banks have requested that Congress fix the loophole in a new crypto bill that will be focused on market structure. That bill will divide the oversight of digital assets between two financial regulators. The House of Representatives already passed its version of such a law last year, and called it the CLARITY Act.

GENIUS Act Stance Sparks Market Participants’ Uproar as Trump Slams Banks

The crypto industry strongly disagrees with the banks’ stance on stablecoin regulations. Many industry leaders maintain that rewards are very important if stablecoins are to compete with traditional payment systems. According to them, removing rewards will weaken stablecoins and significantly reduce their expansion. Siding with crypto industry leaders, the US president argued that Americans deserve to earn more from their money. He stated that banks are making record profits and should not hinder citizens from earning. 

Speaking further, Trump warned that if the United States fails to act quickly, crypto expansion could move to other countries like China. “Banks should not undercut The GENIUS Act, or hold The CLARITY Act hostage. They need to make a deal with the Crypto Industry because it is in the best interest of citizens,” the US president stated. 

JPMorgan Chase, the Chief Executive Officer (CEO) at Jamie Dimon, also spoke on the issue. He said stablecoin products that offer returns should be subject to the same rules as those applied to banks. He argued that equal standards should apply across the financial system. 

Disagreement Between Parties Continues to Stall Stablecoins New Regulation

Meanwhile, this agreement has slowed progress in the Senate, as lawmakers have not been able to move forward with the broader crypto market bill. The White House has made considerable efforts to convince both sides to reach an agreement by hosting several meetings between banking leaders and crypto executives in recent weeks.

So far, all the meetings have ended in deadlock. Trump had earlier asked Congress to complete the market structure bill by the end of February. However, this deadline has elapsed with no concrete agreement.

Moreover, some lawmakers are pushing for quicker action. Representative French Hill suggested that the Senate could simply take up the House’s CLARITY Act and proceed forward with it. Senator Lummis re-echoed Trump’s call for urgency, saying that Congress must pass the bill as quickly as possible. It is left to see how events unfold as talks continue. The outcome of the discussion will determine the future of stablecoins and other digital assets in the United States.