Key Points
- President Trump used Truth Social to criticize banking institutions, claiming they’re sabotaging the GENIUS Act stablecoin legislation
- The core dispute revolves around allowing third-party services to provide yield on customer-held stablecoins
- Banking institutions claim stablecoin yield offerings could cause massive withdrawal of deposits from traditional banking
- Senate Banking Committee delayed its markup session in January following Coinbase’s withdrawal of endorsement
- House Financial Services Committee Chair French Hill proposed the Senate accept the House-approved CLARITY Act language
President Trump used his Truth Social platform on Tuesday to accuse the banking industry of obstructing cryptocurrency legislation.
His criticism targeted banks for allegedly threatening the GENIUS Act — the stablecoin legislation he enacted in July — and attempting to prevent passage of the CLARITY Act, the cryptocurrency market structure bill now stuck in Senate proceedings.
“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 stablecoin regulations while prohibiting issuers from offering direct yield payments to token holders. Nevertheless, third-party services such as cryptocurrency exchanges maintain the ability to provide yield opportunities to their users.
Banking institutions seek to eliminate this provision. Their position maintains that permitting exchanges like Coinbase to provide stablecoin yield products could trigger significant deposit outflows from conventional banking institutions.
Cryptocurrency firms and industry advocates have vigorously opposed any prohibition on yield payment mechanisms.
Coinbase retracted its backing for the Senate legislation in January due to this contentious issue. This withdrawal prompted the Senate Banking Committee to delay its planned markup session indefinitely, with no rescheduled date announced.
Senate Bill Obstacles
The White House has facilitated no fewer than three negotiation sessions between banking sector and cryptocurrency industry representatives this year to reach compromise legislation language.
A preliminary White House target date of late February expired without achieving consensus.
Proposed legislative text is apparently being shared among congressional members, though no official agreement has been publicly revealed.
The Senate faces mounting time constraints. Summer recess looms ahead, while the 2026 midterm election campaign season intensifies.
House Chair’s Recommendation
House Financial Services Committee Chair French Hill offered his perspective during a separate Tuesday event.
He noted the CLARITY Act, which received House approval with 78 Democratic supporters, already establishes that stablecoins function as payment instruments rather than investment vehicles, and therefore shouldn’t provide direct interest payments.
Hill urged the Senate to embrace the House bill’s provisions should they fail to broker their own compromise.
“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 family connections, which distributes its proprietary stablecoin designated USD1.
The Office of the Comptroller of the Currency released a proposed rule framework last week indicating that agreements between stablecoin issuers and third-party partners must explicitly outline what those partners provide — though it declined to impose an outright prohibition on yield payments.
Trump’s statement emerged after multiple days concentrated on U.S. military operations against Iran, which have created disruptions to aviation and maritime commerce throughout the Middle East.
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