Stablecoin Yield Debate Looks Like 'Parallel Banking System,' JPMorgan CFO Says

Source: CryptoNewsNet Original Title: Stablecoin yield debate looks like ‘parallel banking system,’ JPMorgan CFO says Original Link: Stablecoin issuers and distributors offering customers access to stablecoin yield may essentially be creating their own parallel ecosystem to bank operations, global bank JPMorgan’s chief financial officer said Tuesday.

“The creation of a parallel banking system that is sort of — has all the features of banking, including something that looks a lot like a deposit that pays interest, without sort of the associated prudential safeguards that have been developed over hundreds of years of bank regulation, is an obviously dangerous and undesirable thing,” Jeremy Barnum said in response to an analyst question during the bank’s fourth-quarter earnings call.

The U.S. Senate Banking Committee published a new draft of its crypto market structure legislation late Monday, setting a marker for its latest effort to wrangle crypto markets into a federal regulatory framework. While much of the bill focuses on the jurisdiction of the Securities and Exchange Commission and Commodity Futures Trading Commission, as well as other federal regulators, one section seeks to restrict how crypto companies can offer customers yield rewards on stablecoin deposits.