The White House crypto adviser pushed back on JPMorgan CEO Jamie Dimon’s assertion that interest-paying stablecoin issuers should be regulated like banks.
Stablecoins do not need to be treated as deposits because the Genius Act explicitly prohibits issuers from lending the reserves that back their tokens, Patrick Witt, executive director of the President’s Council of Advisors on Digital Assets, wrote in an article
Dimon said banks want stablecoin issuers that pay interest on customer balances to be subject to the same rules as traditional lenders, sharpening the debate over U.S. crypto regulation.
He also addressed reported tensions with Coinbase CEO Brian Armstrong, who withdrew his support for the proposed clarity bill a day before the Senate Banking Committee was set to vote on the legislation. Dimon argued that there should be a distinction between rewards paid on transactions and interest paid on stored balances.
“The rewards are the same as the interest,” Dimon said. “If you’re holding balances and paying interest, that’s the bank. You should be regulated by a bank.”
Banks would accept a compromise in which crypto platforms offer transaction-related rewards, he said. But companies that operate as depository institutions would have to meet the same standards as banks, including capital and liquidity rules, anti-money laundering controls and federal deposit insurance requirements.
“The deception here is that it is not the payment of the return on a balance per se that requires bank-style regulation, but rather the lending or remortgaging of the dollars that constitute the underlying balance,” Witt said. Remortgaging occurs when banks use customer collateral to back their own loans.
He also pointed to the Genius Act, which he said “explicitly prohibits stablecoin issuers from making the latter. Stablecoins ≠ Deposits.”
