Introduction A widening fault line is forming in the digital asset space: products that increasingly resemble regulated financial institutions sit alongside a traditionalIntroduction A widening fault line is forming in the digital asset space: products that increasingly resemble regulated financial institutions sit alongside a traditional

Banks, Stablecoins and ETFs Clash in Crypto’s Next Phase

Banks, Stablecoins And Etfs Clash In Crypto's Next Phase

Introduction
A widening fault line is forming in the digital asset space: products that increasingly resemble regulated financial institutions sit alongside a traditional banking sector warning that some innovations may be overreaching. The week’s developments illustrate the tension, as JPMorgan cautions about yield-bearing stablecoins creating a parallel banking function without the safeguards built through decades of regulation, while Morgan Stanley signals deeper institutional access through ETF filings that could spur rivals to accelerate their own crypto strategies.

Key Takeaways

  • Yield-bearing stablecoins are drawing regulatory and safety concerns from traditional banks.
  • Institutional adoption appears to be accelerating, with major banks filing ETF plans tied to crypto assets.
  • Crypto-native firms are pushing into regulated rails, including on-chain stock lending and broader lending platforms.
  • The industry is navigating a growing regulatory environment as finance and crypto converge.

Tickers mentioned: $BTC, $SOL, $ETH, $USDC, $USDT

Sentiment: Neutral

Price impact: Neutral. The story centers on regulatory and adoption dynamics rather than immediate price moves.

Trading idea (Not Financial Advice): Hold. Market participants should monitor regulatory signals and bank-led adoption trends before making larger bets.

Market context: The narrative tracks a shift from pure crypto trading to institutional-grade infrastructure, underscored by regulatory scrutiny and large-bank participation.

Yield-bearing stablecoins pose serious risks, JPMorgan warns

JPMorgan Chase has embraced blockchain technology and stability coins, but the CFO warns that yield-bearing versions could pose significant risks to the financial system. Speaking on the fourth-quarter earnings call, Jeremy Barnum cautioned that interest-bearing stablecoins could replicate core banking functions without the accompanying prudential safeguards developed over centuries of regulation. The concern reflects a broader banking stance toward yield-bearing structures amid ongoing congressional scrutiny of digital assets.

Despite four-year cycle debates, crypto enters next phase of institutional adoption

While debate continues over the four-year market cycle, industry observers note a structural pivot toward institutional participation. Binance Research describes a shift being led, perhaps unexpectedly, by Morgan Stanley, with recent S-1 filings tied to Bitcoin and Solana ETFs signaling a new phase of mainstream access. The move could accelerate the pace at which other banks—Goldman Sachs, JPMorgan among them—develop their own crypto strategies to stay competitive as institutional involvement expands.

Trump-linked World Liberty Financial targets crypto lending markets

World Liberty Financial is expanding into crypto lending, deploying its USD1 stablecoin on a new lending and borrowing platform called World Liberty Markets. The platform allows collateral in Ether, a tokenized version of Bitcoin, and stablecoins USDC and USDT, with loans denominated in USD1. The company says additional collateral types, including tokenized real-world assets, will be added as the platform grows. The rollout follows World Liberty’s application for a national trust bank charter, aimed at broadening USD1 adoption in cross-border payments and treasury operations.

World Liberty Financial’s stablecoin USD1 has a market capitalization of around $3.4 billion. Source: CoinMarketCap

Figure Technology targets tokenized stock lending

Figure Technology Solutions has launched a system for stock lending that enables investors to lend shares directly to one another on-chain, bypassing traditional intermediaries. The On-Chain Public Equity Network (OPEN) lets companies issue real equity via Figure’s Provenance blockchain; on OPEN, equity represents actual ownership rather than synthetic exposure. Figure’s CEO Mike Cagney notes that shares can be lent or pledged directly on-chain without custodians, with several companies already expressing interest in issuing on OPEN, including digital asset treasury firms.

Shares of Figure Technology Solutions (FIGR) have risen sharply since the company’s September initial public offering, giving it a market capitalization of about $12 billion. Source: Yahoo Finance

This article was originally published as Banks, Stablecoins and ETFs Clash in Crypto’s Next Phase on Crypto Breaking News – your trusted source for crypto news, Bitcoin news, and blockchain updates.

Market Opportunity
Clash Logo
Clash Price(CLASH)
$0.052986
$0.052986$0.052986
+2.00%
USD
Clash (CLASH) Live Price Chart
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact service@support.mexc.com for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Fed Decides On Interest Rates Today—Here’s What To Watch For

Fed Decides On Interest Rates Today—Here’s What To Watch For

The post Fed Decides On Interest Rates Today—Here’s What To Watch For appeared on BitcoinEthereumNews.com. Topline The Federal Reserve on Wednesday will conclude a two-day policymaking meeting and release a decision on whether to lower interest rates—following months of pressure and criticism from President Donald Trump—and potentially signal whether additional cuts are on the way. President Donald Trump has urged the central bank to “CUT INTEREST RATES, NOW, AND BIGGER” than they might plan to. Getty Images Key Facts The central bank is poised to cut interest rates by at least a quarter-point, down from the 4.25% to 4.5% range where they have been held since December to between 4% and 4.25%, as Wall Street has placed 100% odds of a rate cut, according to CME’s FedWatch, with higher odds (94%) on a quarter-point cut than a half-point (6%) reduction. Fed governors Christopher Waller and Michelle Bowman, both Trump appointees, voted in July for a quarter-point reduction to rates, and they may dissent again in favor of a large cut alongside Stephen Miran, Trump’s Council of Economic Advisers’ chair, who was sworn in at the meeting’s start on Tuesday. It’s unclear whether other policymakers, including Kansas City Fed President Jeffrey Schmid and St. Louis Fed President Alberto Musalem, will favor larger cuts or opt for no reduction. Fed Chair Jerome Powell said in his Jackson Hole, Wyoming, address last month the central bank would likely consider a looser monetary policy, noting the “shifting balance of risks” on the U.S. economy “may warrant adjusting our policy stance.” David Mericle, an economist for Goldman Sachs, wrote in a note the “key question” for the Fed’s meeting is whether policymakers signal “this is likely the first in a series of consecutive cuts” as the central bank is anticipated to “acknowledge the softening in the labor market,” though they may not “nod to an October cut.” Mericle said he…
Share
BitcoinEthereumNews2025/09/18 00:23
MicroStrategy Eyes New Bitcoin Milestone With Another Purchase

MicroStrategy Eyes New Bitcoin Milestone With Another Purchase

The post MicroStrategy Eyes New Bitcoin Milestone With Another Purchase appeared on BitcoinEthereumNews.com. Strategy Inc. (formerly MicroStrategy) has signaled
Share
BitcoinEthereumNews2026/01/19 03:32
$HUGS Buyers Already 4x Up

$HUGS Buyers Already 4x Up

The post $HUGS Buyers Already 4x Up appeared on BitcoinEthereumNews.com. Crypto Projects Milk Mocha’s $HUGS coin sits at Stage 11 priced at $0.0008092. Prices climb
Share
BitcoinEthereumNews2026/01/19 03:00