Crypto exchanges offering rewards for stablecoin balances are essentially paying interest. That’s basically doing banking business. If you want to be a bank, go get a license. JPMorgan CEO Jamie Dimon takes a tough stance on Coinbase’s approach to bypassing banking regulations. Crypto exchanges can’t enjoy the benefits of bank-like business on one hand while avoiding the high costs of protecting the public and ensuring financial system stability on the other. • FDIC insurance • Anti-Money Laundering (AML/BSA) • Community Reinvestment Act (CRA) • Capital and liquidity requirements • Transparency and reporting Unregulated financial activities ultimately lead to blow-ups, and the consequences are often borne by ordinary people. Honestly, he’s just worried his deposits will flow to exchanges. Using the saved compliance costs to subsidize users and steal big banks’ customers—this is basically a dimensionality reduction attack in business competition.