Trump’s Proposed Credit Card Rate Cap Sparks Market Turmoil

Financial markets reeled as former President Donald TRUMP proposed a one-year, 10% cap on credit card interest rates set to begin January 20, 2026. The announcement, made via Truth Social, triggered immediate sell-offs in traditional finance sectors while potentially creating tailwinds for alternative lending platforms.

Major banking stocks tumbled in premarket trading, with Citigroup leading losses at nearly 4%. Analysts note the proposal faces significant legislative hurdles, as unilateral executive action lacks authority to implement such caps. The MOVE could force banks to tighten credit standards, potentially pushing borrowers toward decentralized finance alternatives.

Cryptocurrency markets may benefit from capital rotation as investors seek assets uncorrelated to traditional finance regulations. The proposal highlights growing political scrutiny of financial intermediaries, a trend that historically drives interest in blockchain-based solutions.