JPMorgan backs U.S. crypto bill but warns of risks in digital asset framework

The blog comes as the Senate races to advance the Digital Asset Market Clarity Act before lawmakers break for their August recess. While the bill cleared the Senate Banking Committee, negotiators are still trying to resolve several contentious issues, including ethics rules for senior government officials with crypto ties, liability protections for decentralized finance developers, stablecoin yield provisions and concerns from Senate Agriculture Committee Democrats.

Industry groups remain optimistic that the legislation can reach the Senate floor in July, but analysts have warned that failing to pass it before the August recess would sharply reduce its chances of becoming law this year.

In JPMorgan’s view, assets that function like securities should continue to follow securities laws regardless of whether they are issued on a blockchain. Likewise, decentralized trading platforms that serve as exchanges or brokers should be held to the same standards for market integrity, disclosure and customer protection.

JPMorgan also devoted considerable attention to stablecoins, an area where many banks see both commercial opportunity and competitive pressure. While stablecoins and tokenized deposits could improve payment efficiency, the executives warned against allowing products that resemble bank deposits to operate outside the capital, liquidity and consumer protection rules that apply to banks. Features such as rewards or cashback for holding balances, they wrote, could lead consumers to assume they have protections that may not exist, increasing the risk of rapid withdrawals during times of market stress.