Trump reiterates: Make America the crypto capital and defeat China! This is part of the reason for signing the Genius Act.

Donald Trump at the Davos Forum reiterated his plan to make the United States the crypto capital to beat China, emphasizing the importance of the GENIUS Act in strategic dominance. However, the banking industry fears that loopholes in the bill could lead to a $6 trillion outflow of deposits.

Trump: Make America the Crypto Capital, Beat China

U.S. President Donald Trump reaffirmed at the World Economic Forum (WEF) in Davos that he is committed to solidifying the United States as the “world cryptocurrency capital,” emphasizing that this is to defeat China in the digital asset arena and ensure American market dominance.

During his speech at the forum, Trump stated that cryptocurrency policy is a top priority on his agenda, mainly for two reasons.

First is political considerations; he openly admitted that promoting cryptocurrency legislation has garnered him significant political support. Second is strategic factors; Trump emphasized that China also covets this market, so the U.S. must take action, just like in artificial intelligence (AI), to lock in market advantages and prevent China from getting ahead.

Image source: WEF YouTube Trump: Make America the Crypto Capital, Beat China

Trump pointed out that this is part of the reason he signed the milestone Stablecoin Bill, the GENIUS Act, last year.

He further revealed that Congress is currently working on a broader cryptocurrency market structure bill, with two Senate committees advancing related legislation. He hopes to sign the new bill as soon as possible to improve the U.S. cryptocurrency regulatory environment.

Related reports:
Bloomberg: Crypto Market Structure Bill Delayed Until Late February, Trump Calls from Davos “Hurry Up and Let Me Sign”

Stablecoin Bill Passed, but Banking Industry Strongly Opposes

Although Trump has high hopes for the GENIUS Act, the bill has sparked considerable controversy in the traditional financial sector.

The Community Banking Committee under the American Bankers Association (ABA) has sent a letter to Congress pointing out loopholes in the bill, which could allow stablecoin issuers to indirectly pay interest through partners, potentially crowding out bank deposits.

Bank of America CEO Brian Moynihan also warned during earnings calls that if laws permit stablecoin issuers to pay interest, it could lead to a withdrawal of up to $6 trillion in deposits from traditional banks.

Banking industry stakeholders worry that deposit outflows could weaken banks’ ability to lend to small and medium-sized enterprises, farmers, and homebuyers, thereby increasing overall borrowing costs.

Currently, community banks are calling on Congress to amend the bill to prevent regulatory arbitrage, intensifying the legislative competition between the crypto industry and traditional banking.

Related reports:
U.S. Bank CEO Warns: Stablecoins Could Drain $6 Trillion in Deposits, Impact Bank Lending Capacity

U.S. Community Banks: Stablecoins Risk Deposit Outflows! Urge Congress to Close GENIUS Bill Loopholes

Trump Signed Executive Order Last Year to Establish a Task Force and Ban CBDC

Looking back at Trump’s policy stance on the crypto industry, last year he signed an executive order titled “Strengthening America’s Leadership in Digital Financial Technologies,” which decisively reversed the previous administration’s regulatory approach.

The core content of the executive order includes three main points:

1. Establish a federal-level cryptocurrency regulatory framework to ensure the U.S. leads the global industry
2. Adopt an anti-CBDC stance, explicitly banning the issuance of central bank digital currencies to prevent excessive government market intervention
3. Create a cryptocurrency regulatory task force comprising senior officials such as the Secretary of the Treasury, Secretary of Commerce, and SEC Chair, responsible for planning specific policy directions.

Since taking office, the Trump administration has actively attempted to reverse the Biden administration’s strict enforcement and regulation stance on the crypto industry by the SEC, which has also led Congress to enter the most pro-cryptocurrency era in history.