JPMorgan Warns Yield-Bearing Stablecoins Could Evolve into "Shadow Banks", Calls for Stronger Regulation

CoinFeed reported on June 30, according to The Block, JPMorgan's Co-Head of Global Payments Umar Farooq and CEO of Digital Assets and Blockchain Solutions Peter Muriungi co-authored an article calling for the U.S. to establish a comprehensive regulatory framework for digital assets, but did not directly mention the "Clarity Act." The two pointed out that tokenization and programmable money bring innovation opportunities for global payments and 24/7 settlement, but warned that if stablecoins are allowed to pay yield, this innovation could slip into the realm of "shadow banking." The banking industry generally believes that yield-bearing stablecoins could squeeze bank deposits and threaten credit.