Bitwise Slams JPMorgan as Stablecoin Yield Fight Heats Up in Washington

Bitwise CIO Matt Hougan took aim at JPMorgan, challenging America’s biggest banks’ moves to push lawmakers to curb stablecoin yields.

It comes as crypto’s clash with Wall Street escalates, culminating in one of Washington’s most explosive lobbying battles in years.

Bitwise Rebukes JPMorgan Amid Wall Street–Crypto Showdown

The Bitwise CIO slammed JPMorgan, following comments from Bank Policy Institute members and other banking lobbies.

“I think JPMorgan Chase is confused. Can someone tell them that the 0% interest rule is only for stablecoins, not bank accounts?” wrote Huogan.

Matt Hougan highlighted JPMorgan Chase’s negligible interest rates on checking accounts, 0% to 0.01% APY.

JPMorgan Chase’s Interest Rates on Checking Accounts. Source: Matt Hougan on X

This contrasts with the GENIUS Act, passed only recently, which allows interest-bearing stablecoins, suggesting banks may be lagging in competitive financial innovation.

TradFi media says JPMorgan’s highest Certificate of Deposit (CD) rates require a $100,000 deposit and a checking account relationship. This points to a strategic barrier to entry for average customers, potentially driving interest toward stablecoins offering yields up to 5%.

Against this backdrop, banks argue that a loophole lets exchanges such as Coinbase and Binance reward stablecoin holders.

Lobbies press Congress to amend the GENIUS Act, which set the first federal rules for stablecoins. In hindsight, the Act banned issuers like Circle (USDC) and Tether (USDT) from paying interest directly.

Therefore, and in the same tone as Hougan, Ryan Sean Adams, host of the Bankless podcast, accused banks of rent-seeking.

“The banks are trying to stop American citizens from getting yield on their savings. They want to keep it for themselves…Stablecoin yield belongs to the people, not the banks,” he observed.

Stablecoins’ Growing Systemic Weight Amid Washington’s Lobbying “Civil War”

Traditional finance (TradFi) players like the American Bankers Association, Bank Policy Institute, and Consumer Bankers Association warn that allowing stablecoin yields could trigger an unprecedented exodus of deposits, potentially reaching $6.6 trillion.

Such a shift would raise borrowing costs, reduce lending capacity, and severely affect small businesses and households.

“It feels like there’s a move to replace us,” a TradFi media reported, citing Christopher Williston, CEO of the Independent Bankers Association of Texas.

Yet crypto advocates dismiss the panic. Coinbase CLO Paul Grewal said the banks’ warnings are simply an effort to shield themselves from competition.

The stakes rise as stablecoins grow from niche payment tokens into potential macroeconomic drivers. Coinbase Head of Research David Duong recently projected that stablecoins could expand to $1.2 trillion by 2028.

TradFi sees the battle as a lobbying civil war. Republicans are preparing to advance a larger crypto market structure bill this fall, which could cement stablecoin yield as a pillar of US digital asset policy. Wall Street, meanwhile, is mobilizing to block it.

Banks are fighting to preserve their deposit base, while crypto is fighting to democratize yield.

With stablecoins increasingly entangled in US fiscal mechanics, the fight over who controls interest in America may define financial policy in the future.

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