The war on cryptocurrencies. Wall Street faces great public humiliation
Senators are poised to support a bipartisan proposal to end the conflict between banks and cryptocurrency companies that Wall Street lobbyists loathe, paving the way for the passage of landmark cryptocurrency legislation this month.
The outcome of this fight appears to show how the cryptocurrency industry — still a relatively new interest group in Washington — is displacing the established lobbying power of the banking industry. While banks benefited from the favor of GOP-appointed regulators during the second term of the Trump administration, they have spent much of the last two years battling emerging cryptocurrency companies that have invested hundreds of millions of dollars in political and lobbying efforts, using cutthroat tactics to achieve key political victories.
“It's just an unfortunate reality that we've found ourselves in throughout this term of Congress,” says Christopher Williston, CEO of the Independent Bankers Association of Texas, a trade association representing small banks in Texas. — We feel like we're constantly uphill to defending what should be absolutely sacred in Congress, which is economic development and the economic vitality of the community. And yet Congress continues to prioritize so-called innovation over the health of the American economy, especially the rural economy, at every opportunity, he complains.
Latest the fight between the two industries is whether some cryptocurrency companies should be allowed to offer loyalty programs in which customers who hold stablecoins — a type of cryptocurrency designed to hold the value of one dollar — receive an annual percentage return.
Both sides present the issue as a fight for survival. Banks say loyalty programs allow cryptocurrency companies to mimic interest-bearing bank accounts and could cause customers to withdraw their money from traditional banks in favor of cryptocurrency platforms. Cryptocurrency companies defend themselves by arguing that banks are trying to “ban” competition.
The issue has blocked progress on the cryptocurrency industry's biggest priority on Capitol Hill: a sweeping bill aimed at establishing a largely industry-friendly set of regulations that will bring cryptocurrencies closer to mainstream finance.
Banks had two key allies in this fight: Senators Thom Tillis (Republican) and Angela Alsobrooks (Democrat), whose concerns about the “flight” of bank deposits helped delay the Senate Banking Committee's work on a cryptocurrency bill in January. But now banks are opposing the compromise reached by lawmakers, saying it is not enough to clamp down on cryptocurrency-based loyalty programs.
Senator Thom Tillis in the Capitol building, Washington, USA, April 15, 2026.Andrew Harnik / GETTY IMAGES NORTH AMERICA / Getty Images via AFP / AFP
The Tillis and Alsobrooks agreement would prohibit premiums “on stablecoin balances in a manner that is economically or functionally equivalent to the payment of interest or yield on an interest-bearing bank deposit.” Privately, bankers say that while Tillis and Alsobrooks share their goals, the wording still gives cryptocurrency companies too much leeway to offer bonuses that mimic the interest paid on a traditional bank account.
Bankers hope the fight is not over yet. Local bankers and state trade associations are key constituencies for many lawmakers and could help persuade more members if they became more active in lobbying on the issue. However, the cryptocurrency bill is a priority for Republicans in Congress and the White House, and standing in its way would pose significant political risks.
The success of the cryptocurrency industry has come about thanks to the investment of hundreds of millions of dollars in political and lobbying activities. A super PAC group (a PAC is an American committee collecting funds to support or discredit politicians' election campaigns, which it can spend freely, but not directly transfer it to the candidates' teams) dealing with cryptocurrencies has spent over $100 million. (PLN 360 million) to support industry-friendly candidates during the 2024 election cycle. The same PAC network entered this year with almost USD 200 million. (PLN 720 million) to be spent on the 2026 campaign – this is a staggeringly large sum that has cast a shadow over political debates during the current term of Congress.
Banks responded by increasing their own political spending. The Financial Services Forum, representing the eight largest banks in the US, launched a non-profit organization financed from classified sources at the end of last year, with approximately USD 100 million at its disposal.
“It's hard to evaluate and discuss metrics when you're pissed off,” Republican Senator John Kennedy, who has the final say on the fate of the cryptocurrency bill, said last week. — I know a lot of people in crypto are angry. I can tell you that bankers are breaking new records, he added.
In a joint statement issued Monday evening, a group of leading banking industry associations said the agreement from their supporting senators did not go far enough.
“Senators Tillis and Alsobrooks are pursuing the right policy goal of banning the distribution of profits and interest on stablecoins, but the proposed language falls short of that goal. It is imperative that Congress fix this,” the statement reads.
Cryptocurrency companies, meanwhile, are generally willing to accept Tillis and Alsobrooks' compromise, although they say they have already made significant concessions to banks.
Bankers' problems under Trump 2.0
Despite the banking industry's overall enthusiasm for a Trump win in 2024 — exemplified by high bank stock prices fueled by expectations of tax cuts, deregulation and the potential for further consolidation — the past year has proven to be a more sobering one for them. While banks and the financial services industry have achieved a number of successes on the regulatory front, including more lenient lending standards and less burdensome supervision, they are still losing in the fight for cryptocurrencies.
Since late 2025, federal regulators have granted many cryptocurrency companies fiduciary licenses or narrow banking licenses that have helped them enter the mainstream financial ecosystem. The Federal Reserve has also floated the idea of creating “stripped” master accounts, meaning limited access to the Fed's desired payment system for cryptocurrency and digital asset companies. In March, digital asset company Kraken was granted access to the system on a trial basis.
The banking sector has drawn the president's ire from time to time. Earlier this year, Trump called on credit card companies to cap interest rates — a proposal that banks and Congress did not take up — and went so far as to sue JPMorgan Chase for allegedly depriving him and his family businesses of access to banking services.
Bank advocates hope to address what they see as significant gaps in cryptocurrency regulations, but for now they have lost their two biggest allies in the fight, Tillis and Alsobrooks. Asked last week if he was fed up with the way the banking industry was handling negotiations, Tillis said it was “just transactions” to him.
— I don't think so in the 11 and a half years I've been here [w Kongresie USA] I am, there were many members as favorable to traditional banking as I was, he told reporters. But, as you can see, sometimes you need to get people to accept change [zamiast dalszej walki o przywileje tradycyjnej bankowości].
