Bitcoin and cryptocurrency values have fluctuated dramatically this week, as traders express fear that Donald Trump’s tariff strategies could trigger a bitcoin price “crisis scenario.”
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The price of bitcoin has surpassed stocks, following a surprising endorsement from U.S. Treasury Secretary Scott Bessent.
Meanwhile, as BlackRock’s CEO issues a warning regarding the U.S. dollar worth nearly $1 trillion, Wall Street banks are bracing for an “existential” crisis in bitcoin and cryptocurrency as Trump advocates for radical new legislation.
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U.S. President Donald Trump has taken a favorable stance on bitcoin and cryptocurrency—an action that could represent an … More
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Arthur Wilmarth, a law professor emeritus at George Washington University, shared with Reuters that “This poses an existential threat to the banking industry and the financial system as a whole,” warning that taxpayers may ultimately bear the financial burden.
Congress is swiftly moving to enact significant new cryptocurrency legislation, including a stablecoin bill that might allow interest payments to those holding the dollar-pegged cryptocurrencies. Bo Hines, who leads Trump’s Council of Advisers on Digital Assets, indicated last month that the White House aims to push the stablecoin bill through before August.
Currently, a stablecoin bill moving to the House floor prevents issuers from paying interest to holders, whereas a counterpart bill in the Senate excludes interest on specific stablecoins but does not ban it entirely.
Should interest payments be allowed, there is potential for higher-than-average interest stablecoin accounts to draw funds away from insured bank accounts, exposing them to risk if those crypto firms were to fail.
“Stablecoins are emerging as the foremost real blockchain use case to be fully integrated into traditional finance, and we are witnessing the early stages of this evolution,” remarked Hina Sattar Joshi, digital assets sales director at TP ICAP, in emailed insights.
“Significant global movement in stablecoins is expected to attract institutional interest in a digital asset with long-term growth potential, serving as a credible link between traditional assets and cryptocurrency.”
As the two stablecoin bills are reconciled in Congress in the coming weeks, lawmakers will face critical decisions—potentially determining whether stablecoins will serve as the primary checking account tool for both financial institutions and crypto companies or remain a peripheral option.
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Despite a recent downturn, bitcoin has outperformed the “plummeting” stock market.
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Coinbase CEO Brian Armstrong remarked on X earlier this week, “The government shouldn’t favor one industry over another. Banks and crypto firms should both be empowered and incentivized to share interest with their customers.”
The stablecoin market, dominated by Tether’s $144 billion USDT, has experienced rapid growth in recent years, with fintech firms and major Wall Street players such as PayPal and Bank of America eager to launch their own stablecoins, motivated by Tether’s impressive $13 billion profit in 2024 from its backing of bitcoin, gold, U.S. Treasury bonds, and other financial instruments.
“It’s evident that a stablecoin is on the horizon,” stated Bank of America CEO Brian Moynihan, as reported in an interview by DL News. “If it’s legalized, we’ll jump into that sector.”
