JPMorgan CEO slams the crypto industry: "Interest-bearing stablecoins" are equivalent to deposits and should be regulated like banks

In the ongoing battle over stablecoin yields sparked by the CLARITY Act, the most influential Wall Street leader, JPMorgan Chase CEO Jamie Dimon, has spoken out, emphasizing that the banking industry is actively seeking to establish “fair competition rules” with crypto companies. He also issued a stern warning: Any stablecoin offering interest-like returns to users should be treated the same as bank deposits and subject to the same strict regulations.

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

The banking industry’s position is very clear: what’s called a “reward” is essentially “interest.” If you hold customer funds and pay interest, you are doing banking business. Therefore, you should be subject to banking-level regulation.

Regarding the legislative stalemate 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.

Dimon further challenged crypto industry players, saying “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 Federal Deposit Insurance Corporation (FDIC) deposit insurance responsibilities, 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 stated: “We absolutely support competition, but it must be fair and equal.”

The currently debated CLARITY Act in Congress aims to clarify the regulatory authority of 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 — the Senate Banking Committee indefinitely delayed the bill’s review in January. The main point of contention remains the fierce battle between the banking sector and the crypto community over “whether third-party platforms can offer interest on stablecoin deposits to customers.”

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

In response, former U.S. President Donald Trump took to social media platform Truth Social on Tuesday, criticizing traditional banks for attempting to “threaten and undermine” the first U.S. regulation for stablecoin issuers—the GENIUS Act—and called on Congress to swiftly pass a more comprehensive crypto market framework, the CLARITY Act.

Trump urged Congress to accelerate the passage of the CLARITY Act and condemned the banking industry for “sabotaging” the legislation.