Summary
- Jeremy Barnum, JPMorgan CFO, said paying interest on stablecoins is similar to bank deposits but lacks a regulatory framework, calling it “risky and undesirable.”
- He warned that if stablecoins effectively function like deposits, financial system risk could increase.
- A draft CLARITY Act from the U.S. Senate Banking Committee sets requirements for paying stablecoin interest and rewards, restricting payouts based solely on holding; the market sees JPMorgan’s remarks as likely to add momentum to tighter stablecoin regulation.
Jeremy Barnum, JPMorgan’s chief financial officer (CFO), voiced strong concerns about crypto firms paying interest on stablecoins.
According to crypto-focused media outlet CoinDesk on the 13th (local time), Barnum said on a recent earnings conference call that “paying interest on stablecoins has characteristics and risks similar to bank deposits, yet unlike banks, there is not an adequate regulatory framework in place,” adding that “this is clearly risky and undesirable.”
He warned that if stablecoins effectively perform the same function as deposits, the risks to the broader financial system could increase.
Meanwhile, the U.S. Senate Banking Committee, in a recently released draft of the crypto market structure bill (the CLARITY Act), set out clear requirements for paying stablecoin interest and rewards. Under the bill, stablecoin interest or rewards would be permitted only when accompanied by substantive economic activity—such as opening an account, trading, staking, or providing liquidity—while payouts based solely on holding would be restricted.
The market views JPMorgan’s comments as likely to add momentum to discussions on tightening stablecoin regulation going forward.
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