economy
March 4, 2026
Trump sides with crypto firms in trillion-dollar battle with banks over stablecoin yield
The dispute centers on whether crypto firms like Coinbase can offer yields on stablecoins, which banks warn will siphon trillions of dollars from the industry.
TL;DR
- Donald Trump has endorsed crypto firms in their dispute with U.S. banks over stablecoin yields.
- The disagreement centers on whether crypto companies can offer interest on stablecoins, a feature banks warn could lead to trillions in lost deposits.
- This issue is holding up the passage of the Clarity Act in Congress, which is intended to create a framework for regulated stablecoins.
- Trump stated that banks are undermining the Genius Act and need to reach a deal with the crypto industry for the benefit of Americans.
- Coinbase shares rose following Trump's announcement, while major banks like JPMorgan Chase and Bank of America saw slight declines.
- Banks argue that allowing less-regulated crypto firms to function like quasi-banks poses systemic risks, whereas crypto firms believe risks are contained and stablecoins backed by Treasurys will increase demand for U.S. debt.
- White House meetings brokered by Trump between the two sides have not yet resulted in a resolution.
- JPMorgan CEO Jamie Dimon expressed concerns about regulatory disparities and potential public harm.
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