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fintech/news//POLITICO
Dimon said the bill, which has been a priority for the White House, is riddled with issues.
Senators previously aligned with banks are now dismissing their concerns about the crypto-related bill.
KEY POINTS
Internal rifts have emerged among banks, with some less opposed to crypto yield products.
JPMorgan Chase and other banks remain united in opposing the bill in its current form.
Coinbase announced a yield-paying deposit product while Senate negotiations on the bill continue.
No Senate timeline exists for a floor vote as multiple legislative issues remain unresolved.
Senators once seen as sympathetic to bank priorities brushed off their complaints, raising broader worries that traditional finance has lost its sway in Washington. The crypto industry has meanwhile spent massive amounts in political campaigns and lobbied aggressively to gain support for its policy agenda.
Dimon said the bill, which has been a priority for the White House, is riddled with issues, and will be fought when it comes to the Senate floor.
“It allows them to effectively pay interest on deposits, stablecoins or something like that, without the protection they should have. And it does not do anything for AML/BSA,” he said, referring to compliance with anti-money laundering and Bank Secrecy Act rules.
As the bill came closer to a vote in the Senate Banking Committee in May, internal rifts between the banks started to emerge. Large depositors, such as JPMorgan Chase, remained strongly opposed. Other banks, which draw more of their revenue from activities like trading and are less threatened by competition from crypto platforms, were more willing to overlook the yield issue, according to industry insiders.
Dimon emphasized that all the banks are united in fighting the legislation in its current form.
“The banks will not accept it that way,” Dimon said. “The ABA [American Bankers Association], the small banks, the credit unions. It’s not just the big guys.”
Earlier in the week, Armstrong posted on X that Coinbase will offer a product that pays yield on deposits. Dimon was incensed at the “audacity” of Armstrong’s company to offer a yield-bearing product amid the ongoing negotiations, said a person familiar with Dimon’s thinking, who was granted anonymity to discuss private conversations.
The Senate has not indicated a timeline for putting the bill up for a floor vote. A number of other issues remain unresolved in the legislation. Dimon did acknowledge that victory was not guaranteed.
“We’ll fight it. If we lose, we lose. We’ll live,” he said.
JPMorgan Chase declined to offer additional comments.
“At the end of the day, we all share the same goal: improving the financial lives of Americans. Millions of Americans believe this includes preserving rewards programs and passing clear rules that protect consumers while keeping America at the forefront of financial innovation. It’s time for the Senate to bring the CLARITY Act to the floor,” said Coinbase Chief Policy Officer Faryar Shirzad, when asked about Dimon’s comments.