Trump Backs Crypto Firms in High-Stakes Stablecoin Yield Dispute with Banks
By Hugh Son, CNBC | March 4, 2026
In a significant development in the ongoing clash between traditional banking institutions and the cryptocurrency industry, former President Donald Trump has announced his support for crypto firms in their contentious battle over interest-like returns on stablecoins. The dispute centers on whether crypto companies can offer yields on stablecoins, a digital asset pegged to stable fiat currencies, which banks argue threatens their deposit bases.
Trump Calls on Banks to Make a Deal with Crypto Industry
Late Tuesday, Trump took to social media, ramping up pressure on U.S. banks to relent on blocking stablecoin yields. "The Genius Act is being threatened and undermined by the Banks, and that is unacceptable," he stated. "They need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People."
The "Genius Act," passed last year, establishes a regulatory framework for stablecoins, while its companion legislation, the "Clarity Act," currently faces roadblocks in Congress primarily due to the standoff over stablecoin yield offerings. Banks have demanded stricter controls to prevent crypto firms from competing directly by providing interest-like returns traditionally reserved for regulated banking products.
Background: The Battle Over Stablecoin Yield
Crypto companies like Coinbase argue that enabling consumers to earn yields on idle funds stored in stablecoins will foster financial inclusion and innovation. However, major banks, including JPMorgan Chase and Bank of America, warn it could siphon off trillions of dollars in deposits, upending their business models.
According to a recent Treasury Department study cited by banking executives, allowing stablecoin yields could cause up to $6.6 trillion in bank deposits to migrate towards crypto platforms, potentially destabilizing the banking sector. Smaller banks especially face risks of losing funding sources vital for lending to businesses across the country.
Industry Leaders Clash Over Regulation and Risk
JPMorgan CEO Jamie Dimon has been vocally resistant to the crypto model, highlighting concerns about regulatory disparities. "It can’t be, you have these people doing one thing without any regulation, and these people doing another," Dimon told CNBC. "If you do that, the public will pay. It will get bad."
Meanwhile, Coinbase CEO Brian Armstrong, who met with Trump shortly before the president’s social media statement, regards the ability to offer yields as a consumer-friendly innovation that should not be stymied by bank interests. He has publicly called out banks over what he describes as their obstruction of progress in stablecoin regulation.
The tension between Armstrong and banking executives reached new heights when Dimon reportedly called Armstrong "full of s—" during a chance encounter at the World Economic Forum in Davos earlier this year.
Market Reaction and Political Implications
Following Trump’s endorsement of crypto firms, Coinbase shares surged as much as 15% during midday trading Wednesday. Conversely, shares in JPMorgan Chase and Bank of America dipped slightly, falling less than 1%.
Trump’s backing adds a notable voice in favor of the crypto industry within the Republican Party and could influence GOP lawmakers overseeing the legislative process for the Clarity Act. However, analysts remain uncertain whether this support will translate into smooth passage, particularly given the powerful lobbying efforts from the banking sector.
There are also fresh concerns regarding potential conflicts of interest. Trump and his family reportedly hold substantial financial stakes in cryptocurrency ventures, including the platform World Liberty Financial, which has generated significant wealth.
Looking Ahead
In recent months, the White House — under Trump’s leadership — hosted multiple meetings aiming to bridge the divide between crypto firms and banks. To date, these negotiations have failed to produce a resolution satisfactory to both sides.
Now, with Trump explicitly throwing his weight behind the crypto industry, the debate over stablecoin yields and their regulation is poised to intensify.
"Americans should earn money on their money," Trump emphasized in his social media remarks. "This industry cannot be taken from the People of America when it is so close to becoming truly successful."
As the financial and regulatory landscape evolves, the outcome of this dispute will likely shape the future relationship between traditional banks and the burgeoning cryptocurrency sector.
For ongoing coverage of this story and more on finance and tech regulation, visit CNBC’s markets and crypto sections.