TL;DR
- President Trump backs the crypto industry in the dispute over stablecoin returns
- Banks fear that trillions of dollars could leave the traditional banking system
- The GENIUS Act of 2025 explicitly prohibits interest payments on stablecoins in the US
- The debate mirrors a global regulatory trend where stablecoins are treated as payment instruments, not investment products
Billion-Dollar Industry's Fate Decided in Washington
One of the most contentious regulatory battles in American finance right now isn't about Bitcoin — it's about stablecoins and the right to offer returns. According to CNBC, President Donald Trump has now positioned himself on the side of the crypto industry in this conflict, against a banking industry that fears a historic capital flight.
The core of the dispute is simple: Can companies like Coinbase offer their users interest or returns on the stablecoins they hold? Banks believe this would draw trillions of dollars out of traditional deposit accounts and into the crypto sector.
GENIUS Act Sets the Framework — But Trump Wants Exceptions
The US GENIUS Act of 2025 (Guiding and Establishing National Innovation for U.S. Stablecoins) established a federal framework for payment stablecoins. The law explicitly prohibits issuers from paying interest or other returns to holders — directly or indirectly through affiliated parties.
The Office of the Comptroller of the Currency (OCC) has operationalized this prohibition in its proposed rules, regulating stablecoins issued by national banks, foreign issuers, and all stablecoins with more than $10 billion in circulation.
Trump's current support for the crypto industry's desire to amend or circumvent this prohibition represents a political shift with potentially enormous consequences.
A Global Regulatory Consensus — With a Critical Exception
The American showdown takes place against a backdrop where most major regulatory jurisdictions have already reached the same conclusion: Stablecoins should be payment instruments, not savings accounts.
In 2024, the EU, through MiCA, introduced a ban on stablecoins that pay interest on fiat-backed holdings, precisely because this was considered banking activity without equivalent safety nets. Singapore's central bank (MAS) prohibits staking or lending of regulated stablecoins. The UAE's central bank defines fiat-backed tokens as payment tokens without an interest component.
The Financial Stability Board (FSB) has promoted the “same activity, same risk, same rules” principle globally — a principle that in practice argues for treating interest-bearing stablecoins as banking products.
If the Trump administration succeeds in allowing returns on stablecoins in the US, it would represent a significant deviation from the international regulatory trend.
Banks Are Not Without Arguments
It is important to emphasize that the banks' concerns are not unfounded. If millions of Americans choose to hold dollars in yield-bearing stablecoins rather than in traditional bank accounts, it could weaken banks' ability to provide loans and, in the extreme, affect the monetary transmission mechanism.
Critics of the crypto industry's position point out that companies like Coinbase want the privileges of banks — access to trillions in customer deposits — without the same regulatory obligations and capital requirements that apply to banks.
What Happens Next?
The conflict is far from resolved. Congress must decide whether the GENIUS Act should be revised, and the Treasury Department will play a key role in interpreting current regulations. The Trump administration's support for the crypto industry signals political will, but the legislative process is unpredictable.
For crypto investors and companies globally, the outcome of this debate is of great importance: A US opening for yield-bearing stablecoins would put pressure on other jurisdictions, while a maintained prohibition would solidify the international consensus.
The market is in an uncertain phase — Bitcoin is trading around $73,000 and the fear/greed index shows a level of only 10 out of 100 — suggesting that investors are currently more cautious than excited about the outcome.
