Stablecoins were discussed during JPMorgan Chase’s earnings call, with executives supporting blockchain but cautioning against certain stablecoin designs that could threaten the regulated banking system. Interest-bearing stablecoins replicating traditional banking without oversight are seen as dangerous. US banking lobby views yield-bearing stablecoins as disruptive. Stablecoins are rapidly growing for payments and onchain settlement, with yield-bearing versions posing a threat to banks offering modest interest rates.

Stablecoin rewards are a key issue in US lawmakers’ talks on the Digital Asset Market Clarity Act. The legislation prohibits digital asset service providers from paying interest solely for holding stablecoins to prevent them from acting like bank deposits. Incentive structures tied to broader ecosystem participation are allowed, such as rewards for liquidity provision and governance activities. Cointelegraph upholds independent, transparent journalism and provides accurate information.

Read more at Cointelegraph: JPMorgan CFO Warns Yield Stablecoins Threaten Banking System