The White Home’s crypto adviser pushed again on JPMorgan CEO Jamie Dimon’s assertion that stablecoin issuers who pay curiosity needs to be regulated like banks.
Stablecoins needn’t be handled like deposits as a result of the Genius Act explicitly bars issuers from lending the reserves that again their tokens, Patrick Witt, the manager director of the President’s Council of Advisors for Digital Belongings, wrote in an X submit.
Dimon mentioned banks need stablecoin issuers that pay curiosity on buyer balances to face the identical guidelines as conventional lenders, sharpening the talk over U.S. crypto regulation.
He additionally addressed reported tensions with Coinbase CEO Brian Armstrong, who withdrew help for the proposed Readability Act a day earlier than the Senate Banking Committee was scheduled to vote on the laws. Dimon argued there must be a line between rewards paid on transactions and curiosity paid on saved balances.
“Rewards are the identical as curiosity,” Dimon mentioned. “If you’ll be holding balances and paying curiosity, that’s the financial institution. You have to be regulated by a financial institution.”
Banks would settle for a compromise by which crypto platforms provide rewards tied to transactions, he mentioned. However companies that operate like deposit-taking establishments ought to meet the identical requirements as banks, together with capital and liquidity guidelines, anti-money laundering controls and federal deposit insurance coverage necessities.
“The deceit right here is that it isn’t the paying of yield on a steadiness per se that necessitates bank-like rules, however quite the lending out or rehypothecation of the {dollars} that make up the underlying steadiness,” Witt mentioned. Rehypothecation happens when banks use shoppers’ collateral to help their very own borrowing.
He additionally pointed to the Genius Act, which he mentioned “explicitly forbids stablecoin issuers from doing the latter. Stablecoins ≠ Deposits.”
