Donald Trump’s former election campaign manager Paul Manafort said the US President could use the Justice Department to push back against resistance from the banking industry over his administration’s cryptocurrency agenda, as Washington seeks to assert control over the volatile sector.
The country's 50 states each have their own economic systems and can challenge any federal legislation if they deem it to be unconstitutional.
Mr Trump, once a crypto sceptic, has pushed for cryptocurrencies to be included in banking portfolios and make them more accessible to consumers. He has signed off on legislation such as the Genius Act, the Clarity Act and the Anti-CBDC Surveillance State Act to further boost the market.
Mr Trump this year signed an executive order directing "fair and open access to banking services" for the cryptocurrency sector. In April, the Department of Justice scrapped a unit that investigated crypto fraud, effectively loosening oversight of the industry.
Mr Trump has also pushed for the creation of crypto reserves at the state level, but a number of states have opposed the move. Last week, however, Texas became the first US state to create a cryptocurrency reserve with a $5 million purchase of Bitcoin.
Mr Manafort said crypto legislation faced opposition from the banking industry, as it seeks to protect its interests, and political figures. The Texas move, however, was supported by politicians from both sides of the aisle.
"Banks are ... using the political process to try and win at the state level what they can't win at the national level, but the national level will pre-empt the states on this," he said at the Bitcoin Mena 2025 conference in Abu Dhabi on Monday.
In terms of the regulatory process, "if the states challenge that, Washington will go to the courts to make sure that they can't thwart it ... banks may say yes on this side, but they're working to still preserve their monopoly on the other side", he said.
"If necessary, [Mr Trump] will use the power of the Department of Justice against the banks if they try and discriminate against private custody or wallets that are part of the cryptocurrency environment," he added.
The Trump administration's policies are having an influence on the banking sector. In July, JPMorgan Chase chief executive Jamie Dimon said the world's biggest bank would consider issuing stablecoins – days after Mr Trump warned the banking industry that regulators would investigate discriminatory banking practices.
"Banks are still out there doing what they can to [throw] wrenches into the system," Mr Manafort said, emphasising Mr Trump's stance tat legal action would be taken against banks "no matter how big [they are]".
The Trump administration's support for crypto helped Bitcoin soar to new heights, peaking on October 6 at $126,251. However, the cryptocurrency began to tank and a massive sell-off in mid-November dragged it to $89,000, practically wiping out all of its gains less than a year into Mr Trump's second term in office.
As of Monday, Bitcoin was a little more than $92,000, up just about 3 per cent from its November low. Mr Manafort said that, while Bitcoin is down, there is no reason to worry, as creating regulation and building infrastructure "is a process".
"We're not fully out of the woods ... we're just building a whole infrastructure in less than a year," he said. "Mr Trump has made it clear to the leadership in the Congress ... that this isn't something that's debatable."
