President Donald Trump took to Truth Social yesterday to lambast legacy banks and their inability to compromise on crypto market infrastructure legislation. The CLARITY Act (or whatever it ends up being called) remains stalled in the Senate largely due to pushback from incumbent banks and their effective lobbying.
Trump stated:
“The Genius Act is being threatened and undermined by the Banks, and that is unacceptable — We are not going to allow it. The U.S. needs to get Market Structure done, ASAP. Americans should earn more money on their money. The Banks are hitting record profits, and we are not going to allow them to undermine our powerful Crypto Agenda that will end up going to China, and other Countries if we don’t get The Clarity Act taken care of. The Genius Act was the U.S.A.’s first big step to make the United States the Crypto Capital of the World, and getting The Clarity Act done is the next step to finish the job and, most importantly, keep this big and powerful Industry in our Country. The Banks should not be trying to undercut The Genius Act, or hold The Clarity Act hostage. They need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People. This Industry cannot be taken from the People of America when it is so close to becoming truly successful. Thank you for your attention to this matter! President DONALD J. TRUMP”
The single biggest hurdle appears to be whether stablecoin holders should earn interest on these digital assets. As issuers will hold mostly US Treasuries, generating income, they could share the income with stablecoin holders, thereby driving additional benefits. Establishment banks have utilized a FUD strategy to claim that this will undermine their ability to make loans, which are based on holding customer funds and paying little while lending out the funds at a significant interest rate. Banks apparently do not feel they can compete on a level playing field, even though they could offer the exact same stablecoin service.
Having the President voice his disapproval of the bank’s position on stablecoin interest adds additional pressure to the banks to support innovation and the emerging digital asset ecosystem.
Coinbase CEO Brian Armstrong welcomed Trump’s vocal support, stating:
“Gotta give credit where it is due. President Trump and his administration have delivered on his campaign promise to make America the crypto capital of the world. This has already driven major benefits to American citizens and companies. A complete inverse from the prior administration.”
Crypto reporter Eleanor Terrett shared that Armstrong and others visited with the White House yesterday, which may have encouraged the President to publicly share his opinion on the ongoing crypto debate. Later, it was confirmed that Trump met privately with Armstrong.
Crypto Market Infrastructure legislation is desperately needed in the US to move the digital asset ecosystem forward. Establishing regulatory clarity will help make the US the leader in the digital asset sector, as other jurisdictions will look to the US for direction.
Additionally, interest paid on stablecoins will also buttress the US Dollar as the world’s reserve currency as demand should rise dramatically.