🚨 JPMorgan Warns: Yield-Bearing Stablecoins Could Create a "Parallel Banking System"
In the recent quarterly earnings report, Jeremy Barnum — CFO of JPMorgan Chase — delivered a very direct perspective on yield-bearing stablecoins, drawing attention from both the cryptocurrency and traditional banking sectors.
According to Barnum, stablecoin products with a "interest-bearing deposit account" mechanism, yet lacking the stringent oversight typical of traditional banks, pose a potential threat. He described this as a "parallel banking system," operating outside the regulatory framework and rules that have been established over hundreds of years.
Barnum emphasized that JPMorgan is not opposed to blockchain technology or competition in the digital finance space. On the contrary, cryptocurrencies have many appealing aspects and can enhance user experience. However, he stressed that stablecoins must include safeguards for depositors and mechanisms to ensure system stability, minimizing risks.
📌 In summary:
💠 Some stablecoins today are designed to offer more attractive yields than traditional savings accounts — a feature many crypto users appreciate.
💠 This has raised concerns among banks due to the lack of clear regulations, as these products could become an "unregulated financial zone" operating similarly to banks.
💠 Regulators and lawmakers are striving to find a balance: encouraging innovation while protecting consumers and ensuring the overall financial system remains secure.
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