The CEO of JPMorgan Chase Jamie Dimon dragged the fight to Washington: the Clarity Act, as written, is dead on arrival – and Coinbase CEO Brian Armstrong is the enemy driving it.
In Fox Business interview On Friday, Dimon dropped on the pending crypto market regulatory framework, citing threats to the financial system and gifts to companies that want bank positions without responsibility.
“They allow cryptocurrency companies to effectively pay interest on deposits – stablecoins or something – without the security that they have to,” Dimon said. “It has almost no legal protection.”
His main argument: if a crypto platform walks like a bank and talks like a bank, it should be run like one. This means compliance with Anti-Money Laundering, Bank Secrecy Act obligations, FDIC insurance, capital requirements, financial regulations, and oversight of all bank accounts. The Clarity Act, in its view, allows the crypto industry to skip all of this.
The struggle for stablecoin rewards is at the center of the debate. Banks say that allowing crypto exchanges to pay customers with stablecoins will facilitate the flight of deposits from traditional institutions — a clockwork in business that has defined American banks for a century.
Crypto supporters argue that such incentives are a natural evolution of payments. Bill payments are approaching, and neither side is backing down.
Dimon also highlighted the AML problem with stablecoin payments across borders.
“The first may be permissible,” he said, “the second may be a trafficker.” When the money reaches the digital wallet abroad, it can go to the third, fourth wallet – without visibility and accountability. That, he said, is an unsolved risk lurking beneath the prospect of stablecoin demand.
Dimon: Coinbase CEO Armstrong is full of sh*t
But Dimon reserved his harsh words for Armstrong. The CEO of Coinbase, he said, is spending millions of dollars in Washington to push the legislation. “No one is going to bow to this guy,” Dimon said, calling Armstrong “full of sh*t.”
This was not the first time – Dimon he said the same thing at the World Economic Forum in Davos earlier this year.
JPMorgan is not alone. The American Bankers Association, community banks, and credit unions they agree against it to the current bill method.
Dimon made sure that this is a fight – not a negotiation. “We will fight it,” he said. “If we lose, we lose, but we will be beaten.”
