‘The banks will not accept it’: Dimon escalates battle over stablecoin rewards in CLARITY Act debate

JPMorgan Chase CEO Jamie Dimon on Friday yet again sharply criticized Coinbase CEO Brian Armstrong and warned that the latest version of the Clarity Act could ultimately fail if lawmakers do not address concerns from traditional banks over stablecoin regulation.

In an interview with Maria Bartiromo on Fox Business, Dimon appeared frustrated by the direction of the debate around stablecoins and digital asset legislation. Asked whether he was satisfied with the current draft of the Digital Asset Market Clarity Act, the crypto market structure bill that will formalize rules around how federal securities and commodities regulators oversee crypto, Dimon said he was not.

“No, because it allows them to effectively pay interest on deposits, stablecoins or something like that, without protection that they should have,” Dimon said. “The banks will not accept it that way. … I’m not worried about stablecoins but if it happened I’m telling you I will have nothing to do with it and it will eventually blow up.”

The comments come amid a growing divide between the banking industry and crypto firms as lawmakers prepare for a key markup process that will determine whether the Clarity Act can advance through Congress. Lawmakers are expected to continue negotiating provisions governing stablecoin issuers, consumer protections, reserve requirements and whether crypto companies should be permitted to offer yield-bearing products that resemble traditional bank accounts.

For the legislation to ultimately become law, it must clear the full Senate and House of Representatives, and be signed by President Donald Trump. The Senate Banking Committee advanced its version of the bill through a markup earlier this month, and the Senate Agriculture Committee advanced its own version earlier this year. At the moment, representatives from the two committees are merging the bills, a key step before the full Senate can take a look.

At the center of the dispute which dragged out the Banking Committee's process is the question of stablecoin rewards. Armstrong and Coinbase have argued that traditional banks are pushing lawmakers to curb stablecoin rewards programs, which function similarly to high-yield interest accounts and could threaten banks’ deposit-based business models. Banking executives, meanwhile, contend that firms offering bank-like products should face comparable oversight and regulatory obligations.

The disagreement has become one of the primary reasons the legislation has stalled in Washington and failed to gain sufficient momentum earlier this year, despite broad bipartisan interest in creating a regulatory framework for digital assets.

Tensions between Armstrong and Wall Street executives have been building for months. During meetings at the World Economic Forum in Davos earlier this year, Dimon told Armstrong, “You are full of s---,” according to people familiar with the exchange who spoke with The Wall Street Journal.

Bank of America CEO Brian Moynihan reportedly dismissed Armstrong’s arguments, telling him, “If you want to be a bank, just be a bank.” Wells Fargo CEO Charlie Scharf declined to engage, while Citigroup CEO Jane Fraser spent less than a minute with him, according to that prior reporting.

Coinbase and JPMorgan did not respond to requests for comment in time for publication.