The post Banks, Stablecoins and ETFs Collide in Crypto’s Next Phase appeared on BitcoinEthereumNews.com.

A sharp fault line is forming across the digital asset industry between crypto products that increasingly resemble regulated financial institutions and a traditional banking sector warning that some of those innovations may be going too far. That tension is on full display this week. JPMorgan is cautioning that yield-bearing stablecoins risk recreating core banking functions without the safeguards built up over decades of regulation.  At the same time, Wall Street’s engagement with crypto continues to deepen, with Morgan Stanley’s exchange-traded fund (ETF) filings signaling what analysts describe as the next phase of institutional adoption, one that could force other banks to accelerate their own strategies. Crypto-native companies are pushing further into regulated territory. Trump-linked World Liberty Financial is expanding its USD1 stablecoin into crypto lending; Figure Technology, meanwhile, is testing how far blockchain infrastructure can reach into capital markets by enabling onchain stock lending tied to real equity. This week’s Crypto Biz takes the pulse of the growing tension between traditional finance and the expanding reach of digital asset markets. Yield-bearing stablecoins pose serious risks, JPMorgan warns JPMorgan Chase has embraced blockchain technology and expressed interest in stablecoins, but yield-bearing versions could pose significant risks to the financial system, according to the bank’s chief financial officer, Jeremy Barnum. Speaking during JPMorgan’s fourth-quarter earnings call, Barnum addressed questions around stablecoins amid renewed lobbying by the banking sector and ongoing congressional scrutiny of digital asset legislation. Barnum cautioned that interest-bearing stablecoins could replicate core banking functions without being subject to the same regulatory and prudential standards. “The creation of a parallel banking system that sort of has all the features of banking, including something that looks a lot like a deposit that pays interest, without the associated prudential safeguards that have been developed over hundreds of years of bank regulation, is an…

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Filed under: News - @ January 17, 2026 3:19 am