JPMorgan executive: Yield-bearing stablecoins can easily evolve into "shadow banks"

Jinse Finance reported that on June 30, two senior executives from JPMorgan stated that if stablecoin innovation allows for interest generation and yields, it could easily evolve into “shadow banking”. Umar Farooq, Global Co-Head of Payments, and Peter Muriungi, CEO of Digital Assets and Blockchain Solutions at the company, issued a statement calling for the United States to establish a comprehensive digital asset framework, though without directly referencing the “Clarity Act”. The statement noted that “tokenization and programmable money” offer key innovations for global payments and 24/7 real-time settlement. However, yield-bearing stablecoins could veer into “shadow banking”, so stablecoins should be subject to “the same regulatory standards as traditional deposit products”.