Heading into what is forecasted to be a highly competitive midterm cycle, there is one word on the lips of Team Trump and congressional Republicans: Affordability. President Trump has already begun touting the work he’s done to lower costs for American families. After years of suffocating inflation, the economy continues to show strong signs of recovery from the sclerotic Biden years.
The progress made thus far is thanks in large part to the president’s clear vision and decisive action to enforce laws and cut red tape, allowing American business to thrive.
Trump’s innovation agenda has been a key pillar of the administration’s strategy to unleash prosperity for all Americans. The president has embraced cryptocurrency, fintechs, AI, payment innovations, and other tools that have helped millions of people budget, invest, and start and grow businesses. Reducing friction and increasing points of entry into our financial system makes the American Dream more accessible.
In the Oval Office last week, the president underscored his record on the issue, calling himself a “big crypto person” and emphasizing that if the administration hadn’t taken bold steps then China would be leading the sector. Treasury Secretary Scott Bessent agreed, “You made America the digital asset capital of the world.”
They’re absolutely right. When Congress passed and the president signed the GENIUS Act last summer, it marked an historic achievement and affirmed the United States’ global leadership in the digital economy. The law correctly established reserve requirements for stablecoin issuers and critical consumer protections to address concerns about bad actors who might exploit these emerging markets. Even while celebrating the wins in GENIUS, there was broad consensus that more legislation was needed to clarify rules of the road.
One of the key sticking points is over the issue of stablecoin rewards. For the uninitiated, stablecoin is a type of cryptocurrency that maintains a stable value tied to a specific asset or assets, most commonly the U.S. dollar. Unlike keeping your assets in a bank, holding stablecoin allows businesses and individuals to have 24/7 access to their money, make instant transfers, and generally reduce friction that exists with traditional banking.
As reserves that back stablecoin earn interest, those companies want to pass it on to customers. The big incumbent banks, their lobbyists, and some of their allies in Congress are ardently opposed to allowing any sort of yield or rewards. Why?
If stablecoin issuers can give their customers rewards—similar to the rewards you get from remaining loyal to an airline or using certain credit cards—banks may be forced to offer better options to compete for customers.
Banks also argue stablecoin issuers should be subject to the same regulations they are, despite the fact that they aren’t lending money or taking on credit risk like a traditional bank. It’s a false equivalence that just doesn’t hold.
They also argue stablecoins rewards will cause customer flight from community banks, but community banks have survived the advent of credit cards, ATMs, online banking, and mobile payments. They’d adapt to stablecoins, too. The decline of community banks over the last two decades is overwhelmingly due to bigger banks gobbling them up and online banks offering higher interest rates, not newer innovations in cryptocurrency.
Big Banks and their allies are using scare tactics to limit competition. If banks are forced to compete, they will have to raise deposit rates, reduce hidden fees, and improve digital services—all wins for the customer. Banks want to maintain the status quo to protect their profit margins.
Any member of Congress that is more concerned with the bottom line of big bank CEOs over their constituents is not aligned with President Trump and his plans to put Americans first.
These are the same banks that debanked conservatives. They’ve gone after religious groups, Second Amendment advocates, even President Trump and his family.
Why would conservatives continue to run cover for the banks when they’ve shown disdain for the very constituents they’re supposed to be representing? Introducing competition improves flexibility and affordability for all Americans. Loosening banks’ stranglehold encourages better behavior from the legacy institutions.
Even after years of growth, stablecoins represent less than two percent of U.S. bank deposits. Throttling progress in cryptocurrency over a manufactured threat would derail President Trump’s innovation and affordability agendas.
Increasingly, everyday Americans—including small business owners—are using stablecoins, and they deserve rewards if issuers are able to offer them. Anti-innovation opponents think they’re kneecapping the crypto industry, but they’re really hamstringing consumers. It’s time for the Senate to move forward with this legislation without further delay.
John Czwartacki was a CFPB official in the first Trump term and is co-founder and principal at Public Policy Solutions.
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