The President of the United States Donald Trump has accused banks of obstructing the approval of the Clarity Act, the bill that should define a more favorable regulatory framework for cryptocurrency companies.
CRYPTOCURRENCIES, THE CLARITY ACT, AND THE COMPETITION WITH CHINA
In a message posted on social networks, Trump claimed that credit institutions, despite reporting very high profits, are trying to slow down his digital finance agenda. “The Banks,” he wrote, “are recording record profits and we will not allow them to undermine our powerful Crypto-Agenda, which will end up going to China and other countries if we fail to get the Clarity Act approved.”
Besides having personally invested in it, the president has included the cryptocurrency sector within the geopolitical competition with China: among other things, he said that bitcoin is like “the steel industry of a hundred years ago,” that America must become the crypto-capital of the world, and that the nation must strengthen its cryptocurrency “mining” capabilities.
Since it is, in his view, a strategic sector, Trump has therefore urged Wall Street companies to “strike a beneficial deal with the cryptocurrency sector.”
– Also read: Dollar-based stablecoins are the latest geopolitical weapon of the US
TRUMP SUPPORTS CRYPTOCURRENCIES
The main issue, the one creating tensions between traditional finance and the crypto environment, is the possibility for cryptocurrency platforms to offer yields to users holding dollar-pegged stablecoins. Stablecoins, in short, are digital currencies that differ from “traditional” cryptocurrencies because they have a fixed value, usually pegged to the dollar at a 1:1 ratio.
Cryptocurrency companies are asking to be able to pay interest or rewards on deposits in stablecoins. Banks, however, oppose this because they fear a liquidity drain from traditional accounts. Trump has sided with the crypto sector, stating that Americans should be able to “earn more on their money.”
BITCOIN’S RECOVERY
While this regulatory debate is taking place in the United States, Bitcoin – the most popular cryptocurrency – is recovering: today it has gained up to 5.7 percent, surpassing the $71,980 mark, then stabilizing at $71,343. Ether, one of the most widespread cryptocurrencies, has also grown, reaching $2,092 (+6 percent).
THE COMPARISON WITH GOLD
The US and Israel attack on Iran had caused Bitcoin’s price to crash, falling to $63,038. Traditional safe-haven markets, such as gold, also experienced some volatility: prices of the precious metal fell below $5,000 per ounce, for example, then rose back above $5,180.
However, as Bloomberg points out, in recent sessions Bitcoin has outperformed gold, with an increase of about 9 percent since the eve of the attack on Iran, compared to a nearly 2 percent decline in gold.
