As the United States works to establish a framework for digital assets, lawmakers must ensure it includes durable safeguards, according to an article posted Monday (June 29) by JPMorgan Chase.
The article was written by Umar Farooq, global co-head of J.P. Morgan Payments, and Peter Muriungi, CEO of Digital Assets and Blockchain Solutions at JPMorgan Chase.
The authors wrote that while digital assets can reduce friction in payments, shorten settlement cycles, unlock efficiencies and modernize financial infrastructure, any gaps or loopholes in the safeguards around them could push them into lightly supervised channels and weaken longstanding protections.
In market structure and in payments, investors and consumers are likely to expect offerings powered by digital assets to be subject to the same rules and offer the same safeguards as traditional methods, the authors wrote.
“A framework that fails to close these gaps risks recreating the very vulnerabilities financial regulation is designed to prevent,” Farooq and Muriungi wrote.
JPMorgan Chase has demonstrated that digital asset capabilities can operate within an environment that is risk-managed and supervised, they wrote, pointing to the bank’s blockchain business, Kinexys by J.P. Morgan, and its deposit token, JPM Coin.
Addressing lawmakers’ efforts to agree on a framework for digital assets, Farooq and Muriungi wrote: “Getting the framework right will enable responsible innovation by closing loopholes, aligning oversight with economic reality, and preserving the protections that underpin financial stability. The goal should not be simply to move fast, but to build a system that Americans can trust — one that allows innovation to thrive without putting consumers, markets or the broader economy at risk.”
The JPMorgan article arrives at a time when Congress is trying to hammer out an agreement on the CLARITY Act cryptocurrency legislation.
It was reported Thursday (June 25) that with time running out to strike a deal on the bill, senators remain divided on issues such as potential restrictions on President Donald Trump’s ability to profit from digital assets, how to fill empty seats at the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC), how to govern yields on stablecoins and how to combat illicit finance.
JPMorgan Chase CEO Jamie Dimon said May 29 that if crypto companies are going to take deposits like a bank, they should be regulated like a bank and follow the same rules as a bank.
