Stablecoins emerged as a topic during JPMorgan Chase’s fourth-quarter earnings call on Tuesday, with executives expressing support for blockchain technology while warning that some stablecoin projects could threaten the regulated banking system.
The comments came in response to a question from Evercore analyst Glenn Schorr, who asked about stablecoins in delicate of recent industry lobbying by the American Bankers Association and Congress’ ongoing margins related to digital asset legislation.
Responding to a question, JPMorgan CFO Jeremy Barnum said the bank’s position is consistent with the intent of the GENIUS Act, which seeks to establish guardrails around stablecoin issuance.
Barnum cautioned against using interest-bearing stablecoins, which imitate conventional banking, without proper supervision.
“Creating a shadow banking system that has in some sense all the features of banking, including what looks like an interest-bearing deposit, without the associated prudential safeguards developed over hundreds of years of bank regulation, is obviously dangerous and undesirable,” he said. he said.
Barnum added that while JPMorgan welcomes competition and innovation, it remains strongly opposed to the creation of a shadow banking system operating outside established regulatory safeguards.
As Cointelegraph reported last May, the U.S. banking lobby sees profitable stablecoins as a major disruption to its business model, with one industry insider describing the response as a full-blown “panic.” The fear is not unfounded.
Stablecoins have rapidly developed as payment, onchain settlement and dollar access tools, offering faster transactions and lower costs. The prospect of profitable versions only increases the threat, especially as banks continue to offer relatively modest interest rates to depositors.
Related: Wall Street’s Cryptocurrency Debate Is Over as Banks Bet on BTC, Stable Coins and Tokenized Cash
Stablecoin rewards are getting a lot of attention in Congress
Stablecoin bounties have become a key sticking point in U.S. lawmakers’ consideration of the Digital Asset Market Clarity Act, a sweeping proposal aimed at clarifying regulatory jurisdiction over digital assets and defining how cryptocurrency activities are overseen.
Under revised draft rules published this week, digital asset service providers would be prohibited from paying interest or profits “solely in connection with holding a stablecoin,” signaling lawmakers’ intention to prevent stablecoins from functioning like bank deposits.
At the same time, the project leaves room for some incentive structures linked to broader ecosystem participation. These include rewards related to liquidity provision, governance activities, staking, and other network-related functions, rather than the passive profit of owning a dollar-pegged token.
Related: Crypto’s comeback in 2026 depends on three outcomes, says Wintermute
