Trump Says Banks Are Holding CLARITY Act ‘Hostage’ After March 1 Deadline Passes

The President also accused the banks of “trying to undercut” the GENIUS Act and coming in the way of the U.S. becoming “the crypto capital of the world.”

• In a post on Truth Social, Trump said that banks are getting in the way of crypto regulation in the U.S.
• He said if the CLARITY Act isn’t finalized soon, the global crypto power dynamic could potentially shift in China’s favour.
• His comments come after the self-imposed deadline of March 1 while by the White House passed without any deal being finalized between the crypto industry and the banks.

U.S. President Donald Trump on Tuesday said that banks are holding the CLARITY Act “hostage” after the White House’s self-imposed deadline of March 1 passed without any resolution. 

“The banks should not be trying to undercut the GENIUS Act, or hold the CLARITY Act hostage,” he wrote in a post on Truth Social, reiterating his pledge to make the U.S. “the crypto capital of the world.”

Trump’s comments come as the CLARITY Act stalemate continues in Washington. The White House Crypto Council Executive Director,Patrick Witt, set a March 1 deadline for banks and the crypto industry to reach a deal but no decision has been made yet. 

U.S. In A Crypto Race Against China

“The banks are hitting record profits, and we are not going to allow them to undermine our powerful crypto agency that will end going to China, and other countries, if we don't get the CLARITY Act taken care of,” he wrote in a post on Truth Social as tensions between China and the U.S. have also been heating up amidst the clash with Iran. While Iran has blocked all transit through the Strait of Hormuz, it announced that China will be exempt as a token of gratitude for Beijing's support.

“The GENIUS Act was the U.S.A.’s first big step to make the United States the Crypto Capital of the World, and getting the CLARITY Act done is the next step to finish the job, and, most importantly, keep this big and powerful industry in our country,” Trump said.

‘Undercutting’ The GENIUS Act

The Office of the Comptroller of Currency (OCC) recently released a set of guidelines that to make the GENIUS Act official, which outlined that third parties, like Coinbase (COIN), can’t offer rewards on USDC (USDC) because Circle (CRCL) is the one issuing them. 

This would effectively limit each permitted payment stablecoin issuer to a single branded stablecoin. If adopted, the restriction would be paired with a streamlined approval process for issuers seeking regulatory authorization.

“The OCC guidelines are careful to prevent any "workaround" on this yield distribution via third-parties,” Principal Research Analyst at Nansen, Aurelie Barthere, told Stocktwits over email. “If these guidelines are the only regulation for payment stablecoin, this makes it illegal for the likes of Coinbase/Circle, PayPal/Paxos to offer any yield to the stablecoin holders who deposit their money with these companies.”

Crypto Market Holds Steady

The overall cryptocurrency market held steady amid U.S.-Iran tensions and the regulation stalemate at around $2.4 trillion.  Bitcoin (BTC) edged just 0.1% lower in the last 24 hours, trading at around $68,300 on Wednesday night. On Stocktwits, retail sentiment around the apex cryptocurrency dipped to ‘bullish’ from ‘extremely’ territory over the past day. 

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