JPMorgan CEO criticizes the crypto industry: Interest-bearing stablecoins are deposits and should be regulated like banks!

Jamie Dimon intervenes in the controversy over the CLARITY Act, asserting that interest-bearing stablecoins should be regulated like banks, escalating the battle between banks and the crypto industry.

In response to the stablecoin yield battle sparked by the CLARITY Act, the most influential leader on Wall Street, JPMorgan Chase CEO Jamie Dimon, publicly voiced his stance, emphasizing that the banking industry is actively seeking “a level playing field” with crypto companies. He further issued a stern warning: Any stablecoin offering interest-like returns to users should be treated as a bank deposit and subject to the same strict regulations.

In an interview with CNBC on Monday, Jamie Dimon stated that if crypto firms want to reward stablecoin holders with “interest-like” incentives, they should be regulated like banks. He said:

“The banking industry’s position is very clear: what we call ‘rewards’ are essentially ‘interest.’ If you hold customer funds and pay interest, you are doing banking business. If that’s the case, you should be under banking-level regulation.”

Regarding the legislative deadlock over the Digital Asset Market Clarity Act (CLARITY Act), Jamie Dimon suggested that a compromise could be allowing platforms to offer rewards linked to “trading activity”; however, he explicitly opposes the idea of paying “interest-like” yields based on “account balances”—that is, users earning rewards just by holding stablecoins.

Jamie Dimon further told crypto industry players, “If you want to be a bank, then become a legitimate bank”, listing the compliance costs banks must bear, including capital adequacy, liquidity requirements, disclosure obligations, and the responsibility of the Federal Deposit Insurance Corporation (FDIC) for deposit insurance, along with strict anti-money laundering (AML) and community lending regulations.

Jamie Dimon reiterated that JPMorgan Chase does not oppose competition or blockchain innovation. In fact, JPMorgan has already pioneered the development of “deposit tokens” and uses blockchain technology for real-time transfer of funds and data. He said: “We absolutely support competition, but it must be fair and equal.”

The currently debated Digital Asset Market Clarity Act (CLARITY Act) in Congress aims to clarify the regulatory authority divisions between the SEC and CFTC over the crypto industry. The bill was passed with bipartisan support in the House last year but faced obstacles in the Senate—specifically, the Senate Banking Committee indefinitely delayed the bill’s review in January. The main point of contention remains the fierce battle between banks and the crypto industry over “whether third-party platforms can offer interest on stablecoin deposits”.

The origin of this dispute traces back to the successful passage of the GENUIS Act last year, which was initially designed to garner support from the banking sector by explicitly banning “interest-bearing stablecoins.” It prohibits issuing interest to users but does not ban third-party platforms like DeFi protocols and exchanges from offering yield rewards, which has angered banks. They are now trying to reverse this stance during the legislative process of the CLARITY Act, demanding that all potential revenue-generating pathways be shut down.

In response, former U.S. President Donald Trump posted on social platform Truth Social on Tuesday, criticizing traditional banks for trying to “threaten and undermine” the first U.S. regulation for stablecoin issuers, the GENUIS Act, and calling on Congress to swiftly pass a more comprehensive crypto market framework law, the CLARITY Act.

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• This article is reprinted with permission from BlockCast
• Original title: JPMorgan CEO slams crypto: “Interest-bearing stablecoins” are equivalent to deposits and should be regulated like banks
• Original author: Block Sister MEL