New York
Even for Jamie Dimon, the banking titan who’s not recognized to mince phrases, it was a shocking shot throughout the bow when he described a fellow financier as “full of sh*t.”
“No one’s gonna bow down to this guy or that company,” Dimon told Fox Business final week. “This guy” being Brian Armstrong, and “that company” being cryptocurrency alternate Coinbase.
The Dimon-Armstrong tension isn’t new, however it’s boiling over publicly because the Senate inches nearer to a flooring vote on the crypto trade’s No. 1 legislative precedence, referred to as the Clarity Act.
Dimon, a longtime crypto skeptic, broadly helps crypto regulation however takes problem with a provision in the Clarity Act that might enable corporations like Coinbase to “effectively pay interest on deposits… without the protection they should have.”
The spicy remark about Armstrong got here after Dimon rattled off different considerations in regards to the Clarity Act, together with what he sees as its inadequate anti-money-laundering and know-your-customer safeguards that banks have had in place for many years.
Shortly after Dimon’s “full of sh*t” second made the rounds on social media, Armstrong responded on X, posting an apparently AI-generated “Heated Rivalry” meme depicting himself and Dimon as hockey gamers. On Wednesday, he told Politico that he was “perplexed” by Dimon’s rebuke over the invoice that Armstrong believes will finally be “good for the banks.”
“I’ve got a lot of respect for Jamie Dimon, so it was kind of sad to hear that,” Armstrong stated.
In a press release to NCS, Coinbase’s chief coverage officer, Faryar Shirzad, stated that “at the end of the day, we all share the same goal: improving the financial lives of Americans.”
The Clarity Act is rattling Wall Street and shopper advocates alike due to its promise to weave crypto — a traditionally self-contained monetary system susceptible to stomach-churning booms and busts — extra totally into the equipment of conventional finance.
“It’s not just a crypto story, it’s a broad deregulation of our securities markets story,” Hilary Allen, a regulation professor at American University who specializes in banking and cryptocurrency, stated in an interview. And that ought to concern everybody, Allen says, even when they haven’t any investments in any respect, as a result of “if we get a financial crisis in this space… no one comes out of that unscathed.”
The laws was drafted in 2025 to settle a long-running turf warfare over which regulatory physique ought to oversee digital property, like bitcoin or stablecoins.
For years, the crypto trade has argued that it will probably’t be regulated by the Securities and Exchange Commission — the default watchdog for the investing world — as a result of its novel know-how is essentially at odds with the company’s 90-year-old rulebook. (Critics, together with some lawmakers, regulators and shopper advocates, say that argument is simply an try and bypass the principles everybody else performs by and craft a customized framework that places virtually no limits on crypto corporations.)
In 2022, lawmakers launched the Digital Commodities Consumer Protection Act, recognized on Capitol Hill on the time as “Sam’s bill,” or the “SBF” bill after its most distinguished backer, Sam Bankman-Fried. Perhaps unsurprisingly, lawmakers misplaced curiosity in that laws in late 2022 when Bankman-Fried’s FTX buying and selling platform collapsed.
The Clarity Act revives a key objective of the sooner effort: to make sure thatthe Commodity Futures Trading Commission, and never the SEC, is in cost of regulating the majority of crypto markets. Earlier this 12 months, Bankman-Fried, who’s serving a 25-year jail sentence for fraud and conspiracy, tweeted by way of a proxy his assist for the Clarity Act, calling it a “huge milestone” for crypto.
The Clarity Act is billed as “comprehensive market structure legislation that establishes a clear regulatory framework for digital assets,” in accordance with Republican backers on the Senate Banking Committee.
Which is the technical method of claiming it permits crypto corporations to function, in the end, in compliance with US guidelines, quite than what they’ve been doing — basically operating their companies inside a patchwork of state and federal authorized grey areas.
In quick: Clarity goals to create broad guidelines of the highway for crypto and establishes the CFTC as the first trade regulator, quite than the SEC. The invoice cleared the House final 12 months and is predicted to obtain a flooring vote in the Senate in the approaching weeks.
Dimon and different banking leaders, together with the American Banking Association, broadly assist the Clarity Act, however they take problem with provisions that might successfully enable crypto corporations to behave like banks with out the buyer protections and regulatory oversight that banks should adhere to.
The invoice would enable crypto corporations to supply monetary rewards to prospects for utilizing stablecoins, a sort of digital proxy for US {dollars}. Which sounds quite a bit like how chartered banks, equivalent to JPMorgan, provide interest-bearing financial institution accounts.
“If (Armstrong) takes deposits like a bank, he should have bank rules,” Dimon stated in the Fox Business interview.
Coinbase disputes the concept that it’s participating in bank-like habits simply because it accepts buyer funds.
“If you have a brokerage account at Charles Schwab, that’s regulated differently than a bank account is,” Shirzad stated in an interview. “If you have a Starbucks card, that’s regulated differently than a bank account because they’re different products.”
The rapid concern from banks (and plenty of shopper advocates) is that crypto exchanges like Coinbase would, in the grand custom of Silicon Valley innovation, lure prospects in with big rewards after which part these advantages out over time.
Deposits in a crypto alternate are additionally not insured by the federal authorities the best way financial institution deposits are, however that’s the sort of superb print that prospects are likely to overlook till it’s too late.
JPMorgan Chase spokesperson Trish Wexler underscored that the financial institution needs the invoice to go, with some “fixes,” like prohibiting rewards on stablecoin holdings and strengthening anti-money-laundering guardrails.
“Our focus is on educating the senators… and hopefully when it gets to the floor, you’re going to start to see some amendments where rational heads will prevail.”
Ultimately, each Dimon and Armstrong wish to see the Clarity Act handed in one type or one other, and President Donald Trump, whose crypto portfolio now eclipses his real estate holdings, has championed the invoice.
But opponents abound. Sen. Elizabeth Warren has said that the invoice “declares open season” on crypto buyers by wiping out state-level protections in opposition to fraud, whereas failing to “lift even the tiniest finger to address the Trump Administration’s crypto-related corruption.”
Many specialists are involved about the best way the invoice would improve everybody’s publicity to crypto, whether or not they make investments in it or not.
“What they’re doing is opening the door to getting crypto more integrated with mainstream banks,” stated Amanda Fischer, chief working officer for the nonprofit Better Markets. She notes that the FTX implosion of 2022 was unhealthy for crypto buyers — Bitcoin misplaced practically 1 / 4 of its worth in the span of two days — however the fallout was largely contained inside the digital asset ecosystem.
But as extra conventional banks make investments in crypto below the halo of federal regulation, future blow-ups could not keep so confined.
“Our banking system is meant to support lending to households and businesses,” Fischer says. “Not this casino-like activity.”