Trump Unleashes on Banks: “Don’t Hold CLARITY Act Hostage” in Crypto Standoff

In a powerful statement delivered via Truth Social on Tuesday, former U.S. President Donald Trump launched a scathing critique against the traditional banking sector. Trump accused banks of attempting to “threaten and sabotage” the groundbreaking GENIUS Act, the nation’s first legislative framework for stablecoin issuers. Simultaneously, he urged Congress to swiftly pass the more comprehensive CLARITY Act, a critical bill designed to establish a clear market structure for the broader cryptocurrency industry.

Trump’s forceful intervention comes amidst an escalating battle between Wall Street giants and the burgeoning crypto industry. Both factions are fiercely lobbying for their preferred outcomes in the ongoing debate over cryptocurrency market structure legislation. At the heart of this dispute lies the contentious issue of “stablecoin yield” – the interest or rewards users receive from holding stablecoins.

In his post, Trump issued a stern warning to the banking sector, cautioning them against holding the CLARITY Act “hostage.” He underscored the vital importance of this legislation for ensuring the cryptocurrency industry remains firmly rooted in the United States:

“The U.S. must complete market structure legislation ASAP! Americans deserve to make their money work for them.

Banks are making record profits, and we will not allow them to obstruct our ambitious crypto agenda. If the CLARITY Act isn’t passed quickly, these industry advantages will ultimately be handed over to China or other countries.”

The Battle for Crypto Clarity: Understanding the Legislation

The Digital Asset Market Clarity Act (CLARITY Act), currently under congressional review, aims to delineate the regulatory responsibilities between the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) within the cryptocurrency sector. The bill garnered bipartisan support and successfully passed the House of Representatives last year. However, its journey encountered a significant roadblock upon transfer to the Senate, where the Senate Banking Committee indefinitely postponed its review in January, bringing legislative progress to a standstill.

The legislative path for the CLARITY Act remains fraught with contentious issues. The most significant point of disagreement continues to be the intense struggle between the banking industry and the crypto community over whether third-party institutions should be permitted to offer interest on stablecoin deposits to customers.

Stablecoin Yields: The Core of the Contention

To understand the genesis of this dispute, one must look to the GENIUS Act, which passed last year. In an effort to secure banking industry support, the GENIUS Act explicitly prohibited “interest-bearing stablecoins,” forbidding issuers from paying interest directly to users. Crucially, however, it did not extend this prohibition to “third-party platforms” such as DeFi protocols and exchanges, which could still offer yield rewards. This loophole greatly displeased traditional banks, who are now actively seeking to reverse this outcome during the CLARITY Act’s legislative process, demanding that all potential avenues for yield generation be blocked.

Sources close to the matter revealed that banking representatives have submitted revised proposals specifically addressing the treatment of stablecoin yields. However, prior to Trump’s public statement on Tuesday, both the White House and the broader cryptocurrency industry had maintained a notable silence on these developments.

Responding to this perceived obstruction, Trump reiterated his strong condemnation: “Banks should not undermine the GENIUS Act behind the scenes, nor should they hold the CLARITY Act hostage as a bargaining chip. They must negotiate properly with the crypto industry; this is what truly serves the best interests of the American people.”

A Narrowing Legislative Window and Industry Responses

Earlier, Trump had issued an ultimatum, demanding that all parties reach an agreement by the end of February. Over the past month, the White House has actively assumed the role of mediator, facilitating numerous closed-door meetings between representatives from the banking and cryptocurrency sectors. Despite these efforts, both sides remain locked in an impasse. While the Senate technically still has time to advance the bill, the approaching congressional summer recess and the looming 2026 midterm elections are rapidly narrowing the legislative window.

Adding to the discourse, JPMorgan Chase CEO Jamie Dimon publicly stated just this Monday that stablecoin yield products should be subjected to the same stringent regulations as the traditional banking industry, advocating for “a level playing field.”

In a potential path forward, Representative French Hill proposed a pragmatic solution: he suggested that the Senate simply adopt the House’s version of the bill directly. This approach would bypass lengthy debate procedures and expedite the bill’s passage.

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