TLDR
- Trump met Coinbase CEO Brian Armstrong before criticizing banks over stalled crypto legislation.
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Banks warn stablecoin yield rewards could pull deposits away from traditional banking.
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Crypto firms argue the GENIUS Act allows users to earn rewards on stablecoin holdings.
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Coinbase stock rose above $200 amid a broader rally in crypto markets.
U.S. President Donald Trump met Coinbase CEO Brian Armstrong shortly before criticizing banks over stalled crypto legislation. The meeting occurred as policymakers continued debates on stablecoin regulation and digital asset market structure.
Trump later urged lawmakers to pass the Clarity Act while accusing banks of blocking progress on crypto rules. The comments followed a private discussion with Armstrong reported by Politico and confirmed by CoinDesk.
Trump Meets Coinbase CEO Before Crypto Comments
Trump met Armstrong behind closed doors shortly before posting about crypto legislation on Truth Social. Two sources familiar with the matter confirmed the meeting to Politico.
The White House and Coinbase did not respond to requests for comment about the discussion. Details of the conversation between Trump and Armstrong remain unclear.
After the meeting, Trump criticized banks for opposing parts of digital asset legislation under debate in Congress. He said banks should reach an agreement with the crypto industry to advance the bill.
“The U.S. needs to get Market Structure done, ASAP,” Trump wrote on Truth Social. He added that Americans should earn more money on their savings.
Trump also said banks should not undermine the GENIUS Act. He warned that delays in crypto legislation could push innovation toward other countries.
Stablecoin Yield Debate Divides Banks and Crypto Firms
The policy dispute centers on whether stablecoin issuers can offer yield rewards to users. Stablecoins are digital tokens designed to maintain a value close to one U.S. dollar.
Banks argue interest-like rewards on stablecoins could pull deposits away from traditional bank accounts. They also warn this shift could weaken lending activity within the financial system.
Crypto companies disagree and say users should earn returns on stablecoin balances. They argue the GENIUS Act allows rewards while preventing risky lending practices.
Coinbase CEO Brian Armstrong has opposed proposals that restrict stablecoin rewards. In January, he criticized amendments that would limit such programs.
The Senate Banking Committee had scheduled debate on the crypto bill. Lawmakers postponed the vote after banks and crypto firms failed to reach agreement.
Dimon and White House Advisors Clash Over Regulation
JPMorgan CEO Jamie Dimon said stablecoin issuers that pay interest should face bank-like regulation. He argued the activity resembles services offered by traditional financial institutions.
Patrick Witt, executive director of the President’s Council of Advisors for Digital Assets, disagreed with that view. He said yield payments alone should not trigger bank regulation.
Witt said lending or rehypothecating underlying reserves would require stricter oversight. He added that the GENIUS Act prohibits such practices by stablecoin issuers.
He stated that stablecoins should not be treated the same as bank deposits. According to Witt, the legislation clearly separates stablecoins from deposit accounts.
Meanwhile, Senator Cynthia Lummis supported Trump’s call for faster action on crypto legislation. She said Congress must move quickly to pass the Clarity Act.
