Trump sides with crypto in battle with banks over stablecoin yield

President Donald Trump has shown his support for crypto companies in their high-stakes battle with U.S. banks over whether they can provide interest-like returns on stablecoins.

Trump, a social media post Late Tuesday, pressure increased on banks to drop the stablecoin yield issue.

That’s the crux of the contention that has blocked passage in Congress of the Openness Act, a companion bill to the Genius Act that passed last year and created a framework for regulated stablecoins.

“The Genius Act is being threatened and undermined by the Banks and this is unacceptable,” Trump said in his post. “They need to make a good deal with the Crypto Industry because that is what is in the interest of the American People.”

coinbase Its shares rose as much as 11% in early trading Wednesday. JPMorgan Chase And Bank of America fell below 1 percent.

Trump’s decision to support the crypto industry may influence members of the Republican Party in the GOP-led Congress, but it is unclear whether his support will be enough to ensure the bill’s passage. The move also raises new questions about potential conflicts of interest, as the president and his family have reportedly amassed hundreds of millions of dollars in fortunes from shares of firms including crypto platform World Liberty Financial.

Dispute between industries centers on crypto companies like it or not coinbase Stablecoins can also offer returns. While crypto companies see this as a consumer-friendly innovation that will allow people to monetize their idle funds, banks have warned that the rival product could drain trillions of dollars from their industry.

Executives at JPMorgan and Bank of America, America’s two largest lenders by assets, quoted the Treasury. to work This suggests that banks could lose up to $6.6 trillion in deposits if stablecoins yield returns.

This could destabilize some banks, especially smaller ones, and eliminate a source of financing for loans to businesses across the country. Banks argue that allowing the less regulated crypto industry to act quasi-bank could increase systemic risk; Cryptocurrency companies say that risks are under control and that stablecoins backed by Treasury bonds will increase the demand for US debt.

“This can’t be happening, these people can’t be doing one thing without any regulation while these people are doing something else,” JPMorgan CEO Jamie Dimon told CNBC’s Leslie Picker on Monday. “If you do this, the public will pay the price. The situation will get worse.”

In recent months, the president has hosted a series of White House meetings between the two sides in hopes of reaching a deal, but the banks have not relented, according to people with knowledge of the meetings.

He is now clearly putting his emphasis on crypto.

“Americans should make money with their money,” Trump said in his post. “This industry cannot be taken away from the American People when they are this close to truly succeeding.”