In brief
- JPMorgan Chase CEO Jamie Dimon said if crypto firms want to offer stablecoin rewards, then they should become banks.
- White House-led talks between banking and crypto leaders have so far failed to produce a compromise on the issue.
- The impasse has stalled crypto’s coveted market structure bill.
The nation’s most powerful banker offered stern words for the digital assets industry this week, as traditional finance and crypto backers duke it out over key language in a stalled crypto market bill.
The bill faces numerous hurdles, but the most prominent involves a dispute over the ability of crypto companies to pay rewards to customers who hold stablecoins, crypto tokens pegged to the value of the dollar. Crypto giants like Coinbase appear willing to die on the hill that they should be able to offer customers significant yield on stablecoin holdings, while banks have argued such programs could make low-yield bank accounts less attractive, and are unfair.
When pressed on the issue Monday, JPMorgan CEO Jamie Dimon struck a decidedly hardline tone, arguing that if banks were subject to certain restrictions that crypto firms offering yield on stablecoin holdings weren’t, the situation could spell disaster for the U.S. economy.
“It can’t be: You have these people doing one thing without any regulation, and these people doing another,” Dimon said in an interview with CNBC. “If you do that, the public will pay. It will get bad.”
Dimon emphasized the long list of rules that banks offering yield to customers need to comply with, including participation in the federal deposit insurance program, and adherence to 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 under bank law.”
The JPMorgan CEO—a noted Bitcoin skeptic—added he believes such regulations are important, because “you want a safe financial system.”
Under the stablecoin-focused GENIUS Act, which was signed into law by President Donald Trump last summer, stablecoin issuers must comply with certain rules related to anti-money laundering, liquidity, and risk management. But the current drama playing out in Washington has more to do with middlemen like Coinbase, which are seeking to have the right to pass stablecoin rewards onto customers enshrined—or at the very least, not reduced—in a sprawling crypto market structure bill.
That bill, hotly desired by most of the crypto industry, was poised to be voted on by the powerful Senate Banking Committee in January. But on the eve of the vote, Coinbase abruptly pulled support for the legislation, citing the likelihood that senators would approve amendments to the bill restricting stablecoin rewards programs.
The Senate Banking vote was quickly tabled, and it has not been rescheduled.
In an effort to get the issue resolved before Congress grinds to a halt in advance of November’s midterm elections, the White House has hosted multiple meetings between crypto and banking leaders in an effort to find a middle ground.
But those meetings—which the White House initially said needed to produce a compromise by March 1—have yielded few concrete results. Both sides still remain far apart into March, and banking-side negotiators feel a deal may not be reachable before the clock runs out in Congress, Decrypt reported last week.
Crypto industry leaders pushed back on that characterization—but Dimon’s statements this week appear to have reinforced it.
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