JPMorgan Backs US Crypto Rules, Says Safeguards Should Take Priority Over Innovation
Summary
- JPMorgan backed a digital-asset regulatory framework and said risk management and consumer protection should take priority over industry growth.
- Umar Farooq said the Clarity Act could help drive the maturation of the traditional banking industry if it closes existing gaps rather than creating new regulatory ones.
- He said digital assets with the same characteristics as securities and decentralized platforms should also be subject to existing securities laws and rules on market integrity, disclosure and investor protection.
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JPMorgan backed a US regulatory framework for digital assets while stressing that risk management and consumer protection should take priority over industry growth.
Umar Farooq, JPMorgan Payments' global co-head, wrote in a blog post that the pending Clarity Act could help mature the traditional banking industry if it closes existing regulatory gaps rather than creating new ones, CoinDesk reported on June 29.
"Digital assets should not bypass the safeguards that apply to traditional finance," Farooq wrote. Innovation without proper oversight could create new risks for consumers and the broader financial system, he added.
Farooq said tokenization and programmable money could speed up payments and improve cross-border fund transfers. But those benefits can be realized only alongside regulatory clarity and strong consumer protections.
He also said digital assets that have the same characteristics as securities should remain subject to existing securities laws even if they are issued on a blockchain. Decentralized platforms that function as exchanges or brokers should face the same rules as traditional financial institutions on market integrity, disclosure and investor protection, he added.
