Banking Sector Clashes Over Stablecoin Threat as JPMorgan Downplays Risks
Over 100 community bank executives have escalated their campaign against stablecoins, warning U.S. senators of potential $6.6 trillion deposit flight from traditional banks. The American Bankers Association alleges stablecoin issuers circumvent yield restrictions through indirect incentives, threatening local lending ecosystems.
JPMorgan pushed back sharply, stating stablecoins pose no systemic risk and merely represent another payment rail. This contradicts ABA's claims that the GENIUS Act fails to prevent third-party yield arrangements that could destabilize community banking.
The clash highlights growing tension between crypto-native finance and traditional institutions. Bankers fear deposit migration to dollar-pegged tokens like USDT and USDC could accelerate if regulatory gaps persist.
