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Trump sides with crypto firms in trillion-dollar battle with banks over stablecoin yield
US President Donald Trump boards Air Force One before departing Palm Beach International Airport in West Palm Beach, Florida, on March 1, 2026, on his way back to Washington, DC.
Mandel Ngan | Afp | Getty Images
President Donald Trump has thrown his support behind crypto firms in their high-stakes battle with U.S. banks over whether they can offer interest-like returns on stablecoins.
Trump, in a social media post late Tuesday, ratcheted up pressure on banks to relent on the stablecoin yield issue.
That’s the key point of contention holding up passage in Congress of the Clarity Act, which is a companion bill to the Genius Act approved last year, setting up a framework for regulated stablecoins.
“The Genius Act is being threatened and undermined by the Banks, and that is unacceptable,” Trump said in his post. “They need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People.”
Coinbase shares surged as much as 13% in early trading Wednesday, while shares of JPMorgan Chase and Bank of America fell less than 1%.
While Trump’s decision to back the crypto industry could sway members of his Republican Party in the GOP-led Congress, it’s unclear whether his support is enough to ensure the bill’s passage. The move also raises fresh questions over potential conflict of interests, as the president and his family have reportedly generated hundreds of millions of dollars in wealth from interests in firms including the crypto platform World Liberty Financial.
The dispute between the industries centers on whether crypto firms like Coinbase can offer yields on stablecoins. While crypto companies see it as a consumer-friendly innovation that will let people earn money on their idle funds, banks have warned that the competing product could siphon trillions of dollars from their industry.
$6.6 trillion threat?
Executives from JPMorgan and Bank of America, the two largest American lenders by assets, have cited a Treasury study that indicated that banks could lose up to $6.6 trillion in deposits if stablecoins offered a yield.
That could destabilize some banks, especially smaller ones, and remove a source of funding for loans to businesses across the country.
Allowing the less-regulated crypto industry to behave like quasi-banks could heighten systemic risk, banks argue. Crypto firms say that the risks are contained and that stablecoins backed by Treasuries will boost demand for U.S. debt.
“It can’t be, you have these people doing one thing without any regulation, and these people doing another,” JPMorgan CEO Jamie Dimon told CNBC’s Leslie Picker on Monday. “If you do that, the public will pay. It will get bad.”
In recent months, the president has hosted a series of White House meetings between the two sides in hopes of brokering a deal, but the banks haven’t relented, according to people with knowledge of the gatherings.
Now, he is explicitly putting his weight behind crypto.
“Americans should earn money on their money,” Trump said in the post. “This industry cannot be taken from the People of America when it is so close to becoming truly successful.”
‘Full of s–t’
That phrasing is similar to language that Coinbase CEO Brian Armstrong has used in interviews. Coinbase is the largest U.S. crypto platform and provides yield to members through what critics in the banking industry call a “loophole” in current regulations.
Armstrong, seen by banks as their main adversary in this dispute, met with Trump at the White House shortly before the president’s social media post Tuesday, according to a person with knowledge of the meeting. That detail was reported earlier by Politico.
Both banks and crypto firms have reasons to support passage of the Clarity Act, but it’s unclear whether that will happen, given the disagreement. Earlier this year, Trump attempted to pressure banks to cap credit card interest rates, but the industry had enough support among both Republicans and Democrats to ward off that threat.
Tensions between Armstrong and banking CEOs have climbed since the Coinbase CEO publicly called out banks for their opposition to stablecoin yields.
In January, Dimon reportedly told Armstrong he was “full of s–t” during a chance interaction at the World Economic Forum in Davos, Switzerland.
Across the UK, shopfronts are being exploited by criminal gangs pushing illegal drugs, experts say.
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At around 8.25 am, the benchmark US oil contract, West Texas Intermediate (WTI) climbed 4.06% to US$96.73 per barrel.
International oil benchmark Brent North Sea crude rose 3.62% to US$105.63. Both eased back in the following minutes.
Oil prices have soared since Israel and the US attacked Iran on Feb 28, and they have kept inching up due to the uncertainty over whether war will resume.
As the clock ticked for a return to the war that has engulfed the region, US President Donald Trump had said Tuesday he would maintain the truce to allow more time for Pakistani-brokered peace talks.
Iran said it welcomed the efforts by Pakistan but made no other comment on Trump’s announcement.
Wall Street stocks gained ground following President Trump’s unilateral ceasefire extension in the Iran war.
All three major US stock indexes advanced, with tech shares helping to put the Nasdaq out front, while gold advanced and the dollar edged higher.
The S&P 500 and the Nasdaq reached record closing highs.
“Despite the energy shock and headlines that have inundated investors, the macroeconomy, corporate fundamentals, and consumer spending remain strong,” said Bill Merz, head of capital markets research at US Bank Wealth Management in Minneapolis.
“Investors are taking the stance that the Strait of Hormuz will open before too much damage is inflicted on the global economy.”
Iran’s Revolutionary Guards seized two vessels for maritime violations just hours after Trump agreed to extend the ceasefire until negotiations are concluded.
About a fifth of the world’s oil and liquefied natural gas (LNG) supplies normally pass through the strait.
US stocks, initially battered by the war, have since made a full recovery, with the S&P 500 and the Nasdaq having reached all-time closing highs in recent sessions.
But geopolitical uncertainty lingers, and a prolonged period of elevated oil prices remains a threat.
About two-thirds of the S&P 500 companies that have reported quarterly earnings since the beginning of April have voiced concerns about energy prices in their analyst conference calls, according to a Reuters review of transcripts.
“Anytime there’s a global event like the conflict in the Middle East, and it grabs so many headlines and captures attention, it will crop up in earnings commentary,” Merz added. “But we’re not seeing it significantly impact behaviour yet.”
First-quarter earnings season is well underway amid lofty expectations. Analysts currently estimate year-on-year S&P 500 earnings growth of 14.4% for the January-March period, according to the most recent LSEG data.
The Dow Jones Industrial Average rose 341.27 points, or 0.69%, to 49,490.52, the S&P 500 +gained 73.90 points, or 1.05%, to 7,137.91, and the Nasdaq Composite was up 397.60 points, or 1.64%, to 24,657.57.
European shares ended lower for the third straight session as the Middle East strife continued to weigh on markets and investors assessed a raft of corporate earnings.
Dozens of international firms have withdrawn guidance or signalled price hikes since the war began.
MSCI’s gauge of stocks across the globe rose 4.52 points, or 0.42%, to 1,070.98.
The pan-European STOXX 600 index fell 0.35%, while Europe’s broad FTSEurofirst 300 index fell 8.58 points, or 0.35%.
Emerging market stocks fell 9.41 points, or 0.58%, to 1,606.07. MSCI’s broadest index of Asia-Pacific shares outside Japan closed lower by 0.6%, to 822.27, while Japan’s Nikkei .N225 rose 236.69 points, or 0.40%, to 59,585.86.
The dollar rose amid lingering geopolitical worries.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.26% to 98.63, with the euro down 0.32% at $1.1704.
Against the Japanese yen, the dollar strengthened 0.12% to 159.56.
In cryptocurrencies, Bitcoin gained 4.13% to $78,866.74. Ethereum rose 3.48% to $2,398.37.
US Treasury yields increased, rangebound amid choppy trading.
The yield on benchmark US 10-year notes rose 1.2 basis points to 4.304%, from 4.292% late on Tuesday.
The 30-year bond yield rose 1.1 basis points to 4.9091% from 4.898% late on Tuesday.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.1 basis points to 3.8%, from 3.779% late on Tuesday.
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