JPMorgan CFO warns of risks in paying interest on stablecoins

JPMorgan Chief Financial Officer Jeremy Barnum has warned that it is risky for cryptocurrency firms to pay interest on stablecoins, CoinDesk reported. During an earnings call, he noted that while paying interest on stablecoins has the same characteristics and risks as bank deposits, the practice is not subject to the appropriate regulations that govern banks. Barnum described this as clearly dangerous and undesirable. His comments follow the release of a draft bill on crypto market structure by the U.S. Senate Banking Committee. The legislation proposes that interest or rewards on stablecoins be permitted only when tied to substantive activities such as opening an account, trading, staking, or providing liquidity, rather than for simply holding the assets.