Cryptocurrencies In The United States Would Be Regulated

Following the news about the US government not imposing a China-like ban on cryptocurrencies, the anxiety around stablecoins may turn pivotal for broader crypto regulations, according to JP Morgan Chase & Co’s CEO Jamie Dimon.

Dimon noted that “Blockchain can be real, stablecoins can be real,” during a speech at the Institute of International Finance annual membership meeting.

“No matter what anyone in the room thinks, nor what any libertarian thinks, nor what anyone thinks about it, the government’s going to regulate it,” Dimon stressed.

The chief executive further noted that a Treasury Department-led tries to regulate stablecoin application and usage favors policing them like lenders. However, Dimon also echoed his past statements on Bitcoin, differentiating himself from the policy of JPMorgan.

According to Dimon, Bitcoin is worthless, but “Our clients are adults, they disagree, that’s what makes markets, so if they want to have access to buy yourself Bitcoin, we can’t custody it but we can give them legitimately, as-clean-as-possible access.”

Dimon’s opinion comes amid Citigroup chairman John Dugan emphasizing on the need for banks to have vast capital requirements to store crypto assets on their balance sheets.

Citigroup’s John Dugan delved deeper into the idea of higher capital requirements for banks to operate with cryptos, noting that the Basel committee has already come up with such recommendations. 

“The role that they’ve played with respect to ransomware has been very significant and very concerning,” Dugan added.

Furthermore, the president of China’s Bank of Communications Jun Liu added that the rise of stablecoins and CBDCs is a tool to fix the defects the traditional monetary system currently faces. “The traditional way in building public trust in currency has changed, without sovereignty, digital currency cannot go very far,” Liu stated.

However, Liu’s stance comes just a few weeks after Chinese authorities imposed a widespread ban on all crypto transactions and started eliminating crypto mining in mainland China. The ban puts China’s own digital yuan without competition. Furthermore, the bank will introduce the digital currency to rural commercial banks, especially in the Yangtze River Delta region, Liu added.

Meanwhile, Pablo Hernandez de Cos, chairman of the international Basel Committee on Banking Supervision, said that authorities are ready to deploy further restrictions and regulations if needed. De Cos noted that he hopes the Basel III voluntary standards for bank capital, scheduled for release in 2023, would see a high adoption rate.

The IIF meeting began on October 11, and it will continue for a week.