Dimon Declares the Crypto Market Bill 'Dead on Arrival' Over Stablecoin Rewards

Jamie Dimon, chief executive of the largest U.S. bank, JPMorgan Chase, said the pending crypto market legislation known as the CLARITY Act could fail in its current form, warning that "the banks will not accept it," CoinDesk reported. In unusually personal terms he criticized Brian Armstrong, the chief executive of the crypto exchange Coinbase, Bitcoin Magazine reported.

The dispute centers on stablecoins, digital tokens pegged to the dollar, and whether their issuers may pay holders a yield that looks much like the interest on a bank deposit. Banks argue that allowing this would let crypto firms compete for deposits without bank regulation. Crypto firms argue that banks are trying to protect a captive funding base.

A separate concern is oversight. Aaron Klein, a fellow at the Brookings Institution research group, warned that the bill risks creating regulation without oversight, saying the CFTC needs more resources and independence to police digital markets. The deeper question is monetary. A dollar token that pays interest and circulates freely begins to function as private money outside the banking system, which is precisely why both the banks and the regulators are uneasy.