Banks vs. Crypto: The Yield Battle That’s Stalling Legislation

President Donald Trump fired off a Truth Social salvo Tuesday, accusing major banks of “threatening and undermining” the crypto revolution — and urging Congress to fast-track the CLARITY Act before U.S. digital assets get sidelined overseas.

The showdown is fierce: with Wall Street heavyweights Jamie Dimon arguing that crypto firms offering stablecoin rewards should operate under full banking regulations. He also argued that allowing crypto firms to freely offer yield could destabilize the financial system.

“If you want to be a bank, become a bank.”

Crypto companies have pushed back on Dimon's argument, insisting stablecoin rewards are essential for growth. The tension has become the key obstacle preventing the broader CLARITY Act from advancing, leaving Congress deadlocked and industry momentum hanging by a thread.

CLARITY Act Deadlock Threatens U.S. Crypto Leadership

Trump’s frustration comes after he signed the GENIUS Act last summer — the nation’s first federal framework for payment stablecoins, requiring issuers to maintain liquid reserves and follow AML and risk-management rules.

Now, he wants the CLARITY Act to clearly divide regulatory authority between the SEC and CFTC and cement the U.S. as a global crypto hub.

But progress stalled after Coinbase withdrew support after proposed amendments could limit stablecoin rewards, and since then Senate Banking Committee markups have been repeatedly delayed.

Without compromise between banks and crypto firms — and with midterms looming — U.S. leadership in digital assets is at risk.

The Office of the Comptroller of the Currency is moving forward with GENIUS Act implementation, allowing banks to issue stablecoins under federal supervision. Yet without CLARITY, the regulatory landscape remains murky, leaving crypto firms and investors in limbo.

“American leadership in digital assets is a national priority,” says Crypto Council CEO Ji Hun Kim. Trump echoes the urgency: pass CLARITY now, or watch the industry migrate abroad.

Here at Coinlive, we believe that this standoff highlights a crucial tension in the crypto space: innovation vs. regulation. Banks are right to worry about systemic risk, but overregulation risks stifling a sector that thrives on agility and global reach.

The key will be a compromise that allows crypto firms to safely offer yield while ensuring market stability — otherwise, the U.S. could lose its edge in the fast-moving world of digital assets.