Jamie Dimon warns Coinbase must play by same rules as JPMorgan or the ‘public will pay’

If it walks like a bank and talks like a bank, then it probably is one — and should be regulated as such, according to JPMorgan Chase CEO Jamie Dimon.

The banking executive said on Monday that if crypto firms want to pay customers stablecoin rewards, they need to be properly regulated and become banks so they can compete fairly with traditional lenders.

If crypto companies, such as Coinbase, don’t play by the same rules as banks, the “public will pay,” Dimon warned in a Monday interview with CNBC.

“It can’t be: you have these people doing one thing without any regulation like that, and these people doing another,” he said.

Dimon’s comments come as the banking lobby and crypto executives thrash out a market structure bill that would give digital asset firms greater access to traditional markets.

Coinbase in January pulled support for the bill, with the exchange’s CEO, Brian Armstrong, slamming the proposal to ban stablecoin rewards.

Level playing field

Many crypto firms are keen to keep paying customers stablecoin rewards while also managing and holding client assets and handling trade settlement within a federally regulated structure.

But banking chiefs have warned that it would create an unfair playing field — and people would flock to companies like crypto exchanges instead of traditional banks to hold their cash.

“Banks feel strongly that [stablecoin] rewards are the same as interest,” Dimon said. “If you are going to be holding balances and paying interest, that’s a bank and you should be regulated as a bank.”

The Office of the Comptroller of the Currency has granted conditional approval for national trust bank charters to a number of top firms in the digital asset space, including Crypto.com, BitGo, and Ripple.

The banking lobby in December urged the OCC to reject Coinbase’s application for a national trust bank charter on the grounds that the exchange has “demonstrably flawed risk and control functions” and operates under governance that “prevents independent oversight.”

We love blockchain

Dimon, who has long been a Bitcoin sceptic, reiterated that JPMorgan still uses the cryptocurrency’s underlying technology.

“We’re actually one of the biggest users of blockchain,” he said, mentioning the bank’s JPM Coin, a deposit token which runs on Coinbase’s layer 2 network, Base.

But that doesn’t mean rules don’t apply.

“We’re moving a lot of data now using blockchain, so we’re in favour of competition, but it’s got to be a fair and balanced level playing field.”

Mathew Di Salvo is a news correspondent with DL News. Got a tip? Email at [e-mail].