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JPMorgan executives have drawn a direct comparison between yield-bearing stablecoins and shadow banking, warning that stablecoin innovation risks crossing into lightly regulated financial territory if issuers are permitted to pass yield payments to holders.
The bank's argument puts one of Wall Street's most prominent names on the skeptical side of a debate that has been shaping stablecoin legislation in the United States and abroad.
The Argument JPMorgan Is Making The core of JPMorgan's position is that paying yield to stablecoin holders changes the fundamental nature of the instrument.
A stablecoin that simply maintains a peg to a fiat currency functions more like a payment rail.
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