JPMorgan Chase CEO Jamie Dimon slammed Coinbase CEO Brian Armstrong once again on Friday, warning that the latest version of the Clarity Act could ultimately fail if lawmakers don’t address traditional banks’ concerns about regulating stablecoins.
In an interview with Maria Bartiromo on Fox Business, Dimon seemed frustrated by the direction of the debate over stablecoins and digital asset legislation. When asked if he was satisfied with the current draft of the Digital Asset Market Clarity Act, the cryptocurrency market structure bill that will formalize the rules for how federal securities and commodities regulators oversee cryptocurrencies, Dimon said no.
“No, because it allows them to effectively pay interest on deposits, stablecoins or something like that, without the protection that they should have,” Dimon said. “The banks won’t accept it that way… I’m not worried about stablecoins, but if it were to happen, I tell you I won’t have anything to do with it and it will eventually explode.”
The comments come amid a growing divide between the banking industry and crypto companies as lawmakers prepare for a key markup process that will determine whether the Clarity Act can advance in Congress. Lawmakers are expected to continue negotiating provisions governing stablecoin issuers, consumer protection, reserve requirements and whether cryptocurrency companies should be allowed to offer products with yields that resemble traditional bank accounts.
For the legislation to finally become law, it must be approved by the full Senate and House of Representatives, and signed by President Donald Trump. The Senate Banking Committee advanced its version of the bill on a markup basis earlier this month, and the Senate Agriculture Committee advanced its own version earlier this year. For now, representatives from the two committees are merging the bills, a key step before the full Senate can consider them.
At the center of the dispute that prolonged the Banking Committee process is the issue of stablecoin rewards. Armstrong and Coinbase have argued that traditional banks are pressuring lawmakers to limit stablecoin rewards programs, which operate similarly to high-yield interest accounts and could threaten banks’ deposit-based business models. Meanwhile, banking executives argue that companies that offer banking-like products should face comparable regulatory and supervisory obligations.
The disagreement has become one of the main reasons why the legislation has stalled in Washington and failed to gain enough momentum earlier this year, despite broad bipartisan interest in creating a regulatory framework for digital assets.
Tensions between Armstrong and Wall Street executives have been rising for months. During meetings at the World Economic Forum in Davos earlier this year, Dimon told Armstrong, “You’re full of s—,” according to people familiar with the exchange who spoke to The Wall Street Journal.
Bank of America CEO Brian Moynihan reportedly dismissed Armstrong’s arguments, telling him, “If you want to be a bank, just be a bank.” Wells Fargo CEO Charlie Scharf declined to participate, while Citigroup CEO Jane Fraser spent less than a minute with him, according to that earlier report.
Coinbase and JPMorgan did not respond to requests for comment in time for publication.
