U.S. President Donald Trump said bankers are trying to undermine the GENIUS Act — the signature stablecoin legislation he signed into law last year — in a Truth Social post Tuesday, and he urged passage of Congress’ crypto market structure legislation without interference.
“The U.S. needs to get Market Structure done, ASAP. Americans should earn more money on their money,” he said in the post. “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.”
He warned banks against holding the Clarity Act “hostage” in his post, saying the bill was necessary to keep the crypto industry in the U.S.
“They need to make a good deal with the Crypto Industry because that’s what’s in best interest of the American People,” he said.
The market structure bill has been in limbo since the Senate Banking Committee indefinitely postponed a markup hearing, in which lawmakers were set to debate and vote on amendments to the bill, in January. There are a number of issues still holding up passage of the bill, but the most public fight has been between the banking and crypto sectors over whether third parties can offer yield on stablecoin deposits to customers.
Banks are concerned that allowing Coinbase and other exchanges to offer stablecoin yield to customers might lead to deposit flight from the banking sector. Crypto companies contend that people should be allowed to earn yield on their holdings, a practice they say was allowed in the GENIUS Act.
The White House has facilitated meetings between banking and crypto industry representatives to negotiate the language of the bill. Individuals familiar with the negotiations say draft language is circulating among lawmakers, but a deal has not yet been reached.
The Office of the Comptroller of the Currency, a federal banking regulator, said in a rule proposal last week that the terms of the contracts between stablecoin issuers and their third-party associates need to be clear about what exactly these third parties are offering, but the agency did not explicitly ban yield payouts.
World Liberty Financial, a company associated with Trump and his family, offers its own stablecoin, USD1, and it recently sought to secure a trust charter under the OCC for an affiliated firm.
Trump has spent the last few days overseeing U.S. military strikes against Iran, in what the U.S. government has described as a “special combat operation.” The emerging hostilities have disrupted air travel throughout the Middle East, as well as shipping through the Strait of Hormuz.
www.coindesk.com
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