JPMorgan minimizes fears related to stablecoins

Stablecoins have long been the discreet plumbing of crypto. Nobody applauds them, but without them, part of the market seizes up. Today, they are coming out of the shadows for a very concrete reason: savings and bank deposits. In the United States, local bank leaders are pressing the Senate to tighten certain points of legislation on stablecoins. Their fear: seeing part of the deposits migrate to dollar tokens, attracted by “rewards” that increasingly look like a yield. On the other side, JPMorgan refuses to give in to alarmism. The bank sees it rather as a new brick in a monetary system already composed of several layers. And this reading gap says a lot about the battle underway: financial stability, competition, or a simple war of models?

Local banks: the fear of a deposit air pocket

The alarm signal comes from the American Bankers Association (ABA), via its Community Bankers Council, a council that carries the voice of local banks within the association. The message is direct: there exist “blind spots” allowing some crypto players to bypass the prohibition on interest paid by issuers.

The sensitive point is not the stablecoin itself, but the surrounding packaging. An issuer can officially not pay interest, while letting the crypto ecosystem create incentives: cashbacks, loyalty programs, benefits via partner exchanges. In the end, the user retains one thing: “my tokenized dollar yields.”

For small banks, this is not a theoretical debate. Their model depends on deposits. These deposits feed loans to households and SMEs. If the base shrinks, local credit slows. And it is the “Main Street” players who bear the shock, not the giants able to finance themselves otherwise. These arguments hit hard, but they are not unanimous. This is where JPMorgan steps in with a very different tone.

JPMorgan: a complementary tool, not a systemic threat

JPMorgan downplays the idea of systemic risk. Its reading is more structural: money already circulates in several forms, with distinct uses. Bank deposits are not the only existing “layer,” and they never have been. In this vision, stablecoins, deposit tokens, and traditional rails can coexist.

This speech is not a caress for crypto. It is a way of framing the market. JPMorgan suggests that stablecoins will be especially useful where they are objectively better: near-instant settlements, cross-border payments, 24/7 availability, automation via programmable systems.

And there is an undertone: competition is not resolved only through regulation. It is also resolved through supply. If the public turns to alternatives, it is often because traditional products seem slow, opaque, or not generous. Stablecoin does not invent the desire for yield. It just puts it in a more modern envelope.

We then understand that the real battleground is not “blockchain vs bank.” It is the exact definition of a yield, and the right to distribute it.

Crypto: disguised yield, protection of the public or protection of margins?

The key question boils down to one sentence: from when does a “reward” become interest? An occasional cashback is not a savings account. But a regular mechanism, presented as a holding benefit, can end up resembling remuneration. And if it passes through a partner, the boundary becomes even more blurred.

This is precisely what the ABA wants to lock down: that the ban not only targets the issuer but also affiliates and platforms that could recreate a yield by proxy. For the crypto ecosystem, the potential impact is immediate: some “yield” products, certain exchange offers, certain distribution strategies would be forced to reinvent themselves.

Supporters of stablecoins respond that the debate goes beyond security. They see a classic tension: should consumers be protected by limiting incentives, or should a historic banking model be protected by curbing competition? The financial sector has already experienced this kind of friction: whenever a simpler, or just more attractive, alternative gained ground. And while the arm wrestling continues, a still fragile American crypto law could derail everything.