Trump Blasts Banks for Undermining GENIUS Act, Says Stablecoin Yield Serves U.S. Interests

The GENIUS Act, signed into law in July 2025, barred stablecoin issuers from paying interest directly to holders but left room for exchanges and affiliated platforms to offer rewards. Banks say such products resemble deposits without equivalent capital, supervision or Federal Deposit Insurance Corp. protection. Crypto companies counter that lenders are using legislation to defend low-cost deposits and the interest spread they generate, pushing the dispute into negotiations over the CLARITY Act.

The fight now centers on Section 404 of the CLARITY Act. On July 13, 2026, 78 banking groups led by the American Bankers Association and Independent Community Bankers of America urged Senate leaders to close what they called a rewards loophole, citing estimates that deposit outflows could reach $6.6 trillion. Crypto advocates point to savings rates as low as 0.01%, compared with stablecoin rewards of about 3.75%, and argue consumers should be allowed to choose the higher return.

US President Donald Trump signed the GENIUS Act on July 18, 2025, establishing the first federal regulatory framework for payment stablecoins. The law covers issuer eligibility, reserve assets and redemption mechanisms. It takes effect on the earlier of 120 days after final rules are issued or 18 months after enactment. The consistency of rules across agencies will shape competition between banks and crypto companies.

On April 21, 2026, groups including the American Bankers Association and the Bank Policy Institute wrote to the Treasury Department, the Federal Deposit Insurance Corporation, FinCEN and OFAC. They asked the agencies to wait until the Office of the Comptroller of the Currency completes its issuer rules and then allow a comment period of at least 60 days. The banking groups said the three rules are interdependent and warned that finalizing them simultaneously could create inconsistent standards and enforcement conflicts.