Trump favors crypto in battle with banks over stablecoin revenue

President Donald Trump Their support is behind crypto companies in their high-stakes battle with US banks over whether they can offer interest-like returns on stablecoins.

Trump, in A Social media posts Late Tuesday, pressure on banks increased over the issue of stablecoin yields.

This has been a key point of contention for the passage in Congress of the Clarity Act, a companion bill to the Genius Act passed last year, setting the framework for regulated stablecoins.

“The GENIUS Act is being bullied and undermined by the banks and that is unacceptable,” Trump said in his post. “They need to deal well with the crypto industry because that’s what’s in the best interest of the American people.”

Coinbase Shares rose as much as 11% in early trading on Wednesday, while shares of JP Morgan Chase And Bank of America fell less than 1%.

Trump’s decision to support the crypto industry may sway his fellow Republicans in the GOP-led Congress, but it’s unclear whether their support will be enough to pass the bill. The move also raises new questions about potential conflicts of interest, as the president and his family have amassed hundreds of millions of dollars in wealth through interests in companies including crypto platform World Liberty Financial.

The debate in the industry centers on whether or not crypto companies like it Coinbase Can generate income on stablecoins. While crypto companies see it as a consumer-friendly innovation that allows people to cash in on their idle funds, banks have warned that a competing product could siphon off trillions of dollars from their industry.

Executives at JPMorgan and Bank of America, two of the largest US lenders, cited the Treasury. Study It suggests banks could lose up to $6.6 trillion in deposits if stablecoins yield. This could destabilize some banks, especially smaller banks, and eliminate a source of funding for loans to businesses across the country.

“It can’t be, you have these people doing one thing without any regulation and these people doing another,” JP Morgan CEO Jamie Dimon CNBC’s Leslie Picker said Monday. “If you do that, the public will pay. It will be bad.”

In recent months, the president has held several White House meetings between the two sides to broker a deal, but Banks has not relented, according to people with knowledge of the meetings.

Now, he is clearly throwing his weight behind crypto.

“Americans should earn money on their money,” Trump said in the post. “This industry can’t be taken away from the American people when it’s really close to being successful.”