Trump Accused Major Banks of Undermining the GENIUS Act

• Trump accused major banks of trying to weaken the GENIUS Act and stall the CLARITY Act.
• Banks warn yield-bearing stablecoins could trigger up to $6.6 trillion in deposit outflows.
• Sen. Lummis urges fast passage to cement the US as a global crypto leader.

US President Donald Trump publicly accused major banks of trying to derail the administration’s crypto agenda, saying the GENIUS Act is being threatened and undermined by the banking sector.

In a Truth Social post on Tuesday, Trump said the US must pass market structure legislation as soon as possible and warned that delays would push crypto innovation to China and other countries.

The GENIUS Act, signed into law in July, created the first federal framework for payment stablecoins. It requires issuers to hold 1:1 liquid reserves, follow anti-money-laundering rules, and meet risk management standards. It also bans stablecoin issuers from directly paying interest to holders.

Trump framed the law as a key step in making the US the global center for digital assets. He now argues banks are trying to weaken it indirectly by stalling follow-up legislation.

Yield Payments at the Center of the Dispute

The conflict stems from stablecoin yield. The GENIUS Act blocks issuers from paying interest but does not clearly stop third-party platforms such as Coinbase or Kraken from sharing yield generated on reserve assets like US Treasury bills.

Banks call this a loophole. Trade groups warn that allowing exchanges to pass through yield could trigger up to $6.6 trillion in deposit outflows, citing a US Treasury analysis.

Bank of America CEO Brian Moynihan said in January that interest-bearing stablecoins could divert 30-35% of commercial bank deposits.

Crypto executives argue exchanges operate under licensing, reserve requirements, audits, and anti-money-laundering rules. They also say yield is essential to compete with savings accounts that often pay near zero.

The Senate’s market structure bill, known as the CLARITY Act, became the battleground. Banks are pushing to add language banning all forms of stablecoin yield, including third-party rewards. Crypto firms oppose reopening the issue.

Legislative Clock Is Tight

Meanwhile, the White House set an informal March 1 deadline for a deal, which has passed.

Multiple meetings between crypto and banking lobbyists at the White House failed to produce an agreement. The Office of the Comptroller of the Currency also released a 376-page proposed rule under the GENIUS Act.

Representative French Hill said the Senate should consider passing the House version of the CLARITY Act if it cannot advance its own draft.

Senator Cynthia Lummis urged Congress to move quickly, calling the bill essential to making the US the digital asset capital of the world.

A coalition of more than 125 crypto companies launched a campaign last year opposing bank efforts to restrict stablecoin rewards. Cardano founder Charles Hoskinson said banks amended the bill 137 times and accused them of trying to shut down the industry.

Related: Hoskinson Warns CLARITY Act Makes New Tokens Securities by Default