The White House’s crypto adviser pushed back on JPMorgan CEO Jamie Dimon’s assertion that stablecoin issuers who pay interest should be regulated like banks.

Stablecoins need not be treated like deposits because the Genius Act explicitly bars issuers from lending the reserves that back their tokens, Patrick Witt, the executive director of the President’s Council of Advisors for Digital Assets, wrote in an X post.

Dimon said banks want stablecoin issuers that pay interest on customer balances to face the same rules as traditional lenders, sharpening the debate over U.S. crypto regulation.

He also addressed reported tensions with Coinbase CEO Brian Armstrong, who withdrew support for the proposed Clarity Act a day before the Senate Banking Committee was scheduled to vote on the legislation. Dimon argued there needs to be a line between rewards paid on transactions and interest paid on stored balances.

“Rewards are the same as interest,” Dimon said. “If you are going to be holding balances and paying interest, that’s the bank. You should be regulated by a bank.”

Banks would accept a compromise in which crypto platforms offer rewards tied to transactions, he said. But firms that function like deposit-taking institutions should meet the same standards as banks, including capital and liquidity rules, anti-money laundering controls and federal deposit insurance requirements.

“The deceit here is that it is not the paying of yield on a balance per se that necessitates bank-like regulations, but rather the lending out or rehypothecation of the dollars that make up the underlying balance,” Witt said. Rehypothecation occurs when banks use clients' collateral to support their own borrowing.

He also pointed to the Genius Act, which he said “explicitly forbids stablecoin issuers from doing the latter. Stablecoins ≠ Deposits.”