David Sacks, President Trump’s AI and crypto czar, foresees a fundamental shift where traditional banks dive headlong into cryptocurrencies, erasing the divide between Wall Street stalwarts and digital-asset innovators. In a recent CNBC Squawk Box interview, Sacks declared, “The banks are going to get fully into the crypto industry. So we’re not going to have a separate banking industry and crypto industry. It’s going to be one digital assets industry.” This prediction, made amid stalled market-structure legislation, signals a pivotal moment for finance, with banks poised to issue stablecoins and embrace yields once regulatory clarity arrives.

The catalyst is the anticipated crypto market-structure bill, expected for Senate markup in January 2026. Sacks, speaking as White House advisor, urged compromise on contentious stablecoin rewards, noting, “I’m in favor of reaching a solution and facilitating a compromise so that we can get a bill for market structure on the president’s desk.” Banks oppose third-party platforms offering yields, arguing they circumvent restrictions, while crypto firms see them as vital for competition. Sacks warned banks: “If the bill ends up dying, then there will be a form of rewards.”

President Trump bolstered the push during his World Economic Forum speech in Switzerland, voicing support for the legislation. This aligns with the administration’s pro-crypto stance since Trump’s December 2024 appointment of Sacks, a PayPal alum and Craft Ventures partner who divested over $200 million in crypto holdings before joining. Sacks’s vision builds on the GENIUS Act, signed in August 2025, which regulates stablecoins and already permits yields in certain forms.

Stablecoin Standoff Halts Progress

The GENIUS Act—formally the Guiding and Establishing National Innovation for U.S. Stablecoins—marks a milestone, with regulators like the FDIC proposing procedures for banks to issue stablecoins via subsidiaries by mid-2026. Yet, its passage “died about three times before it finally passed,” Sacks recalled on CNBC, likening it to current negotiations. Banks, via the American Bankers Association, lobby to close perceived loopholes allowing affiliates to offer stablecoin rewards, fearing deposit drains.

Crypto Briefing reported Sacks pressing for parity: “Everyone offering the same product should be regulated in the same way.” He predicted banks would warm to yields, stating, “I bet you over time the banks like the idea of paying yield because they’re going to be in the stablecoin business.” Industry voices echo this: Ripple President Monica Long forecasts half of Fortune 500 firms adopting crypto strategies by end-2026, with stablecoins as global payment standards, per Yahoo Finance (originally Benzinga).

Mike Novogratz, Galaxy Digital CEO, agrees compromise is key on stablecoin rewards to bridge with banks. Senate Banking Chair Tim Scott released a 278-page draft barring passive yields but allowing activity-based incentives, setting up a showdown as markup looms.

Sacks’s Track Record Fuels Optimism

Sacks’s influence traces to Trump’s executive actions post-inauguration, including Bitcoin reserves and digital-asset stockpiles holding up to 200,000 BTC worth billions. He met Senate leaders like Scott and John Boozman, confirming January action: “We are closer than ever,” Sacks posted on X. CoinDesk detailed his push for harmonization, quoting, “A good compromise is everyone leaves a little bit unhappy, right?”

Early signs of bank entry emerge: Bank of America now permits advisors to recommend 1%-4% crypto allocations via Bitcoin ETFs for eligible clients starting January 2026, per X posts from Ticker Wire. JPMorgan, PayPal, Visa, and Mastercard explore stablecoins, per analyst outlooks. The CLARITY Act, advancing alongside, would split SEC/CFTC oversight, lowering barriers like SAB 121 on custody.

Coinbase CEO Brian Armstrong withdrew support over yield bans, delaying markup, but Sacks views it strategically: Yield matters philosophically to crypto, but market structure is paramount. Fortune noted banking lobby panic over yields threatening profits, with ABA spending millions lobbying.

Legislative Path and Bank Incentives

DL News outlines 2026 milestones: GENIUS implementation by July, market-structure hearings in January, midterms looming. FDIC’s stablecoin procedures signal banks’ readiness. Sacks, addressing Davos, emphasized U.S. leadership against China, with Trump declaring America the “crypto capital.”

X discussions highlight momentum: Fundstrat’s Tom Lee cited Sacks on convergence benefiting Ethereum and DeFi. Phemex News and TradingView amplified predictions of banks flooding crypto post-bill. Critics like Sen. Elizabeth Warren flagged Sacks’s past holdings, but ethics waivers cleared him after divestments.

The Block reported Senate drafts prohibiting passive stablecoin yields, carving exceptions for actions like trading. If passed, expect trillions in institutional capital, per Ripple’s outlook, with custody deals surging—over half of top 50 banks adding partners in 2026.

Institutional Floodgates and Risks

American Banker early noted Sacks could ease bank-tech partnerships, fulfilling his 2017 view of Bitcoin as PayPal’s “new world currency.” Reuters Breakingviews speculated Trump bailouts via reserves if crises hit, as banks dabble. Goldman Sachs forecasts strong 2026 for Bitcoin amid cuts and clarity.

Forbes highlighted Fed rollbacks enabling Wall Street crypto embrace, with Sacks predicting a “Trump boom.” Yet risks persist: Midterms could shift power, per DL News; volatility from geopolitics. X threads like Edgar G’s detail CLARITY’s bank custody potential, polarizing Ripple vs. Coinbase.

Sacks’s roadmap—compromise, clarity, convergence—positions 2026 as transformative. As banks eye stablecoin issuance for yields and efficiency, the unified industry he envisions nears, reshaping finance under Trump’s watch. CoinDesk captured the essence: Banks see stablecoins as market entry.