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\n\t\t\t\t\t\t\t\t\tSchiff said stablecoins have a legitimate use case, despite his longstanding criticism of much of the broader crypto industry.\t\t\t\t\t\t\t\t<\/p>\n<\/p><\/div>\n
Economist Peter Schiff publicly broke with JPMorgan CEO Jamie Dimon on June 7, arguing that stablecoin issuers should not be held to the same capital and compliance standards as banks.<\/p>\n
The comment surprised many, given that Schiff is well-known for being a huge crypto basher.<\/p>\n
In a post on X, Schiff stated<\/a> that Dimon wanted crypto companies offering interest-bearing products to be held to the same capital and compliance requirements as traditional banks, a point he thoroughly disagreed with.<\/p>\n \u201cThat\u2019s nonsense,\u201d he wrote. \u201cBanks are FDIC insured and make risky loans under a fractional reserve system. Stablecoin issuers don\u2019t.\u201d<\/p>\n<\/blockquote>\n And when a follower pointed out that the position seemed at odds with his history of criticizing crypto\u2019s lack of investor protection, Schiff clarified his reasoning, saying:<\/p>\n \u201cStablecoins have a use case and issuers are not banks, especially if the tokens are 100% backed by dollars and invested exclusively in Treasuries.\u201d<\/p>\n<\/blockquote>\n Journalist Eleanor Terrett also noted<\/a> the rarity of the moment, posting on X that it was the first time somebody outside of crypto had argued that stablecoins shouldn\u2019t be put under the same regulations as banks.<\/p>\n Dimon\u2019s comments came during a public interview in late May, where he attacked the CLARITY Act, which had been advanced 15-9 by the Senate Banking Committee earlier that month.<\/p>\n His objections centered on stablecoin yield provisions, which he said would let crypto companies effectively pay interest on deposits without the protections that banks are subject to and without adequate anti-money laundering (AML) requirements.<\/p>\n He also didn\u2019t have kind words for Coinbase CEO Brian Armstrong, who has been lobbying hard for the bill, saying \u201che\u2019s full of shit.\u201d\u00a0On his part, Armstrong said that he was \u201ca little perplexed\u201d after Dimon\u2019s comments but insisted that he still had \u201ca lot of respect\u201d for the JPMorgan chief executive.<\/p>\n Senator Cynthia Lummis, another strong supporter of the bill, said<\/a> Dimon had either not read the bill or just wanted to \u201cmislead people.\u201d She pointed out that, contrary to what Dimon was claiming, the CLARITY Act had actually extended provisions of the Bank Secrecy Act to digital assets.<\/p>\n Dimon\u2019s outburst was the public face of a lobbying campaign that\u2019s been running for months, with the American Bankers Association sending<\/a> over 8,000 letters to Senate offices in the days leading to the committee vote, pushing for changes to the bill\u2019s language on stablecoin yields.<\/p>\n The AML question has also been a real sticking point, with the Bank Policy Institute sharing data showing<\/a> that last year, illicit crypto flows jumped 162% to hit $154 billion.<\/p>\n That figure, it claimed, was partly driven by a nearly 700% increase in value received by sanctioned entities, with stablecoins, mostly Tether\u2019s USDT, accounting for 84% of all illicit transaction volume.<\/p>\n Schiff, for his part, hasn\u2019t had a change of heart regarding crypto. As recently as this past weekend, he posted a poll on X asking<\/a> followers how low BTC would have to fall before they admitted that he\u2019d been right all along about the asset.<\/p>\n Additionally, he recently claimed that the flagship cryptocurrency could go as low<\/a> as $20,000 if it breaks below $50,000. For now, the asset is trading back above $63,000 after a massive price slide that saw it plummet<\/a> to a 19-month low near $59,000.<\/p>\n LIMITED OFFER for CryptoPotato readers at Bybit: Use this link<\/a> to register and open a $500 FREE position on any coin!<\/b><\/p>\n<\/div>\n<\/div>\n\n
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