Shares of Coinbase (NASDAQ:COIN) moved dramatically higher today following a public statement by President Donald Trump voicing his support for the crypto industry and disappointment regarding legacy banks holding up the crypto market infrastructure legislation.
Currently, Coinbase shares are trading at around $208 $209, a more than 14% move higher since yesterday’s close.
The thesis is that White House pressure could move the ball forward toward the CLARITY Act’s approval in the Senate.
The administration has voiced its goal of making the US the world’s crypto capital. To accomplish this, the market needs regulatory clarity, which is being sought via legislation.
But Fintech innovation in the digital asset sector will change how banks operate, and incumbents worry about the traditional banking model of holding client funds and paying little, and lending these same funds at significantly higher interest rates could reduce an easy revenue source. Stablecoin issuers want to provide yield or interest payments for users. This is good for consumers, but not good for the traditional banking business. Of course, banks could adapt and change, an option which is not lost on the President.
If an agreement between crypto industry leaders and legacy banks can be reached, a bill should move through the Senate and, eventually, then soon reach the President’s desk for signature into law. Regulatory clarity in the US will help shape the global digital asset industry, as other jurisdictions align with or seek to accommodate US market rules. If stablecoin yield is allowed, the fortress dollar as the world’s reserve currency will become unchallenged.