After JPMorgan CEO Dimon made claims that stablecoin issuers paying interest should be following bank link regulations, the critics took over to share their opinions. In a post on X, Eric Trump, son of U.S. President Donald Trump, criticized major U.S. banks for lobbying against legislative efforts to make cryptocurrency platforms to pay interest on stablecoin holdings.
Banks are preventing crypto rewards
Following the comments of U.S. President Donald Trump, stating that the United States must become “dominant” in crypto. He criticized major banks, accusing them of sabotaging the administration’s crypto agenda.
Later that day, Eric Trump criticized the banking sector for preventing U.S. crypto investors from earning rewards or yields through stablecoins and digital assets.
Eric criticizes Big Banks for curbing stablecoin yields
Eric argued that the big banks, like JPMorgan Chase, Bank of America, and so on, are “lobbying” overtime to stop Americans from enjoying the benefits of stablecoin yields.
“These banks, and others, pay rock-bottom rates on standard savings (often 0.01%–0.05% APY), even as the Fed pays them 4% or more,” Eric said, adding up, this spread gives the massive profits to banks, yet none reaches the customers or everyday depositors, pointing to a widening gap between what financial institutions pay depositors and what they earn elsewhere.
The co-founder of the cryptocurrency platform, World Liberty Financial, is responsible for issuing the USD1 stablecoin and the WLFI cryptocurrency. Hence explains the Trump family’s involvement in the project, drawing criticism over potential conflicts of interest for the U.S. president.
“Stablecoins aren’t bank deposits”
The White House’s crypto adviser also spoke against the comments of CEO Dimon, affirming that the Genius Act explicitly restricts issuers from lending the reserves that back their tokens; therefore, stablecoins need not be treated like deposits.
Stablecoin issuer: Banks are terrified
The debate around stablecoin regulation continues to divide policymakers and industry leaders. According to Eneko Knörr, CEO and cofounder of Stabolut, traditional banking does not try to protect consumers.
Stabolut, a fintech specializing in DeFi, is the issuer of USB, a yield-bearing stablecoin pegged to the US dollar (USD).
“I’m watching the traditional banking lobby panic in real-time. They aren’t trying to protect consumers; they’re terrified because our industry is bypassing their monopoly and finally returning real yield to the people,” he said to AltCoinDesk.
Eric Trump also said that banks fear losing 30% to 35% of their deposits if people move their savings to crypto platforms, providing them higher returns. If that happens, banks would potentially face around $6.6 trillion in lost deposits and hundreds of billions in annual revenue.
“Instead of competing with our efficiency, the banks are desperately trying to suffocate crypto innovation with red tape just to protect their massive profit margins,” Knörr added.
Trump’s move for the crypto ecosystem
An X user, Nate Geraci, president of NovaDius Wealth Management, said the SEC apparently is not waiting around for regulators to figure out how to classify crypto assets but rather moving forward and making the call themselves.
Trump is positioning himself firmly on the side of crypto’s growth, calling the Genius Act, a major step to making the U.S. the crypto capital of the world.
“However, what truly caught me off guard is President Trump’s recent intervention. I am genuinely surprised and impressed that he chose to go head-to-head with the banking cartel—arguably the most powerful lobby in the world—to defend us.” Knörr stated, as proof of his commitment to crypto, that it was not ‘just talk’.
He added, “His commitment to dismantling the legacy financial chokehold is far bigger and bolder than anyone expected.”
