Trump: GENIUS Act is being 'threatened and undermined' by banks
As a delay over passage of the Senate Banking Committee's CLARITY Act crypto bill drags on, President Trump this week made his most forceful statement about the impasse by blaming the banks for holding up the legislation.
The main sticking point between bank lobbyists and the crypto industry over the bill is centered around stablecoin rewards, which banks have been pushing lawmakers to ban, calling them a "loophole" that crypto companies are exploiting in the GENIUS Act's stablecoin law that bans issuers from offering interest on the assets.
The GENIUS Act does not explicitly ban rewards, but the Senate Banking Committee's latest draft did eliminate them, which led Coinbase (COIN) to withdraw its support for the crypto market infrastructure bill. Senate Banking Committee Chair Tim Scott in turn delayed voting on the bill in order to try and resolve this dispute.
Coinbase CEO Brian Armstrong said that banning stablecoin rewards would allow "banks to ban their competition."
Patrick Witt, President Trump's chief advisor for digital assets, had set March 1 as the date he wanted to resolve the impasse, but that date came and went without a resolution.
And now President Trump is speaking out on the delay by laying blame on the banks for essentially trying to resolve the main disagreement they have with the GENIUS Act through legislation in the CLARITY Act.
“The Genius Act is being threatened and undermined by the Banks, and that is unacceptable — We are not going to allow it,” Trump said in a post on Truth Social. “The U.S. needs to get Market Structure done, ASAP. Americans should earn more money on their money.”
Did meeting with Armstrong influence Trump?
Treasury Secretary Scott Bessent recently appeared to blame Coinbase for holding up voting on the CLARITY Act in an interview with Fox Business, blaming "recalcitrant actors" for the delay, while adding that "both the banks and the other crypto firms are united against them."
But widely followed crypto investor, analyst and journalist Paul Barron said in a post on X that his sources told him the “White House is now leaning on banks, and the banks are holding the CLARITY Act hostage.”
Trump's latest Truth Social post seemingly confirms Barron's reporting, with the president saying that the banks "should not be trying to undercut The Genius Act, or hold The Clarity Act hostage."
"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.
"The Genius Act was the U.S.A.’s first big step to make the United States the Crypto Capital of the World, and getting The Clarity Act done is the next step to finish the job and, most importantly, keep this big and powerful Industry in our Country," he added.
According to Politico, Armstrong met with Trump on Tuesday before the president took to Truth Social and criticized the banks. Neither the White House nor Coinbase has commented on the meeting, and Politico was unable to find out what Armstrong and Trump had discussed.
Meanwhile, JPMorgan CEO Jamie Dimon said in an interview with CNBC on Tuesday that if crypto firms are going to offer stablecoin rewards, then they should face the same regulations as banks.
“Rewards are the same as interest,” Dimon said. “If you are going to be holding balances and paying interest, that’s the bank. You should be regulated by a bank.”