Trump Slams Banking Industry for Blocking Crypto Legislation Progress

Key Takeaways

• President Trump used Truth Social to publicly criticize banking institutions, claiming they’re sabotaging the GENIUS Act stablecoin legislation
• The core dispute revolves around whether third-party services can provide yield on customer-held stablecoins
• Banking institutions claim allowing stablecoin yield could result in massive deposit outflows from traditional banking
• January saw the Senate Banking Committee delay its markup session following Coinbase’s withdrawal of support
• Representative French Hill, House Financial Services Chair, proposed the Senate should pass the House version of the CLARITY Act

On Tuesday, Trump used his Truth Social platform to lambaste banking institutions for obstructing cryptocurrency legislation.

His statement targeted banks for threatening the GENIUS Act — stablecoin legislation he enacted in July — while attempting to prevent passage of the CLARITY Act, which remains deadlocked in Senate proceedings.

The GENIUS Act establishes stablecoin regulations while prohibiting issuers from offering yield directly to token holders. Nevertheless, third-party services such as cryptocurrency exchanges maintain the ability to provide yield to their customers.

Banking institutions demand this provision be eliminated. Their position is that permitting platforms like Coinbase to offer yield on stablecoins would trigger significant deposit migration from conventional banking institutions.

Cryptocurrency firms and their advocates have mounted fierce opposition to any restrictions on yield offerings.

Coinbase withdrew its backing for the Senate legislation in January due to this controversy. This development led the Senate Banking Committee to postpone its planned markup session indefinitely, with no rescheduled date announced.

The Roadblocks Facing Legislation

The White House has convened no fewer than three negotiation sessions between banking and cryptocurrency industry stakeholders this year attempting to resolve legislative language.

A tentative White House target date at the end of February came and went without reaching consensus.

Reports indicate draft legislative language is being shared among congressional members, though no formal agreement has been publicly disclosed.

Time is running short in the Senate. The summer recess looms ahead, while the 2026 midterm election campaign season is gaining momentum.

Representative Hill’s Position

During a separate Tuesday event, House Financial Services Committee Chair French Hill offered his perspective.

He noted the CLARITY Act, which secured passage in the House with support from 78 Democratic representatives, already confirms that stablecoins function as payment instruments rather than investment vehicles, and therefore shouldn’t generate interest directly.

Hill urged the Senate to embrace the House bill’s provisions if Senate negotiations continue to stall.

Trump additionally mentioned World Liberty Financial, a company connected to his family that issues its proprietary stablecoin named USD1.

Last week, the Office of the Comptroller of the Currency released a proposed rule stating that agreements between stablecoin issuers and third-party partners must explicitly detail the services those partners provide — though it fell short of imposing an outright prohibition on yield payments.

Trump’s statement followed several days during which his focus was primarily on U.S. military operations against Iran, which have caused disruptions to aviation and maritime commerce throughout the Middle East.

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