The debate over digital asset legislation in the United States has taken another turn. JPMorgan Chase CEO Jamie Dimon recently publicly criticized the current draft of the CLARITY Act, arguing that its provisions on stablecoin rewards are too lenient and could allow issuers to offer products with deposit-like interest rates without bearing the same regulatory obligations as banks.

Dimon's Anti-Deposit Returns

In an interview with Fox Business, Dimon stated that he does not approve of the current draft bill. According to him, a system where stablecoin issuers can effectively pay interest on deposits without providing corresponding safeguards is difficult for the banking industry to accept.

He also stated that he is not worried about stablecoins themselves, but if the arrangements are implemented as they are now, they could ultimately lead to bigger problems. These statements indicate that the banking industry is becoming increasingly wary of stablecoin-yield products.

Incentive provisions slow down the progress of the bill

The CLARITY Act aims to clarify the division of responsibilities among U.S. federal securities and commodity regulators in the crypto market, but debates surrounding stablecoin issuers, reserve requirements, consumer protection, and yield-generating products are slowing its progress.

Currently, stablecoin reward terms have become one of the focal points of negotiations in Washington. Crypto companies want to retain the space to offer users yield rewards, while banks argue that as long as the product's functionality is similar to that of a bank account, it should be subject to similar regulatory requirements.

• The Senate Banking Committee has advanced a version of the bill this month.
• The Senate Agriculture Committee passed an earlier version.
• The two committees are integrating the texts and awaiting further review.

The disagreement between banks and Coinbase has become public.

Coinbase CEO Brian Armstrong previously stated that traditional banks are pushing lawmakers to restrict stablecoin reward programs because these products are similar to high-yield deposit accounts and could impact banks' deposit-dependent business models.

Banking executives take a more direct stance. They believe that if crypto companies offer banking-like products, they should bear corresponding prudential regulatory and compliance responsibilities. Dimon's public statement signifies that this conflict has escalated from industry lobbying to open confrontation.

Additional information:For the bill to become law, it still needs to pass both the U.S. Senate and House of Representatives and be signed by President Trump. CoinDesk reported that neither Coinbase nor JPMorgan Chase responded to requests for comment before publication.