The country’s most powerful banker offered stern words for the digital asset industry this week, as traditional backers of finance and cryptocurrencies fight over key language in a stalled cryptocurrency market bill.
The bill faces numerous hurdles, but the most prominent involves a dispute over the ability of cryptocurrency companies to pay rewards to customers who hold stablecoins, cryptographic tokens pegged to the value of the dollar. Cryptocurrency giants like Coinbase appear willing to die on the hill of being able to offer customers significant returns on stablecoin holdings, while banks have argued that such programs could make underperforming bank accounts less attractive and are unfair.
When pressed on the issue on Monday, JPMorgan CEO Jamie Dimon took a decidedly tough tone, arguing that if banks were subject to certain restrictions that crypto firms offering yield on stablecoin holdings were not, the situation could spell disaster for the US economy.
“It can’t be: these people do one thing without any regulation, and these people do another,” Dimon said in an interview with CNBC. “If you do that, the public will pay. It will get worse.”
Dimon emphasized the long list of rules that banks that deliver returns to customers must comply, including participation in the federal deposit insurance program and compliance with numerous requirements related to anti-money laundering standards, transparency, community investment, reporting and governance.
“If you want to be a bank, become a bank,” Dimon said. “Then you can do whatever you want according to banking law.”
The JPMorgan CEO, a prominent Bitcoin skeptic, added that he believes such regulations are important because “what you want is a secure financial system.”
There’s a new DeFi bill in Congress – what does that mean for crypto market structure?
According to the GENIUS Act focused on stablecoins, which was signed signed into law by President Donald Trump last summer, stablecoin emitters must comply with certain regulations related to anti-money laundering, liquidity and risk management. But the current drama unfolding in Washington has more to do with intermediaries like Coinbase seeking the right to pass along stablecoin rewards to customers enshrined (or at least, not reduced) in a sprawling bill on crypto market structure.
That bill, highly desired by most of the cryptocurrency industry, was about to be voted on by the powerful Senate Banking Committee in January. But on the eve of the vote, Coinbase abruptly thrown support for the legislation, citing the likelihood that senators would pass amendments to the bill restricting stablecoin rewards programs.